London's looks east - to its Docklands
The Isle of Dogs. Canary Wharf. Heron Quays. West India Docks. The names recall days when packet steamers chugged in from east of Suez and burly dock workers shouldered commerce in and out of London. Containerized shipping and a drop in British foreign trade, however, caused the Docklands at London's East End to decay in the recent decades.
But to the international colony of developers and financiers in the London of the 1980s, the Docklands represent a vast, undeveloped resource and the potential location of a huge new financial city - at least in theory.
``People were prepared to move 20 or 30 miles to the west to find office space,'' says Greg Ernest, a spokesman for the Canary Wharf Development Company. But the Isle of Dogs is less than five miles to the east of the City (London's Wall Street) and vastly underused.
In 1985, Credit Suisse/First Boston, the Travelstead Group, and Morgan Stanley unveiled plans for a $4.8 billion skyscraper complex at Canary Wharf on the Isle of Dogs. It was to include Europe's three tallest skyscrapers, be twice as costly as the English Channel tunnel project, provide some 7,000 sorely needed construction jobs for Britain, and eventually bring up to 57,000 new jobs to the city.
It was also to be a monument to late 20th century architecture (though plans were decried by some Londoners as American-style ``Rambo architecture'' - all steel, glass, and height).
While few people are bearish on London's financial future, however, this particular project is in trouble - the apparent victim of rising construction costs and an emerging glut of office space. Many companies want to rent at Canary Wharf, if it is completed, but there is growing reluctance to finance the project.
Morgan Stanley and Credit Suisse/First Boston are reportedly on the verge of pulling out. Although they decline to comment, sources say these companies might still build office towers and/or occupy office space even if they do not finance the overall development.
Even if Canary Wharf does not proceed, says an official close to the development, it has accomplished two important purposes:
The fight to develop it has shaken up restrictive London building policies and given a boost to property development elsewhere in the city.
The threat of 25 a square foot ($40) office space at Canary Wharf has moderated the explosion in financial-district rents, which have been fetching upwards of 50 a square foot ($80).
``That in itself is a big achievement,'' says this official, who asked that his name not be used. Canary Wharf has been stalled for several months, pending a master building agreement.
Officials of the London Dockland Development Corporation and the Canary Wharf Development Company contend the project will proceed. One possibility for taking up the slack if the American companies pull out, they say, are Japanese financial houses, which have been pouring into London in recent months.
Whatever Canary Wharf's outcome, the Docklands seem certain to expand London's business district eastward and upward.
An important milestone in the City-Docklands link occurs next month with the opening of a light-rail line from the Isle of Dogs to Tower Bridge. An underground line is planned between there and the Bank of England, in the heart of the financial district, by 1990. Here, too, there is foot dragging, and London Regional Transport has given developers until July 17 to come to terms.
At the very least, the British newspaper industry is enthusiastic about the Docklands. Newspapers have been moving to Wapping and the Isle of Dogs. The Guardian, the Daily Telegraph, and Rupert Murdoch's properties, including the Times, now set up printing plants here.
But as newspapers move out of Fleet Street and as other areas near the City become developed, the office vacancy rate in London is rising. This is why there is reluctance to back the 8.8 million square-foot complex at Canary Wharf.