The two London districts most closely associated with the global financial and banking sectors have turned towards the hospitality sector as they look to recreate themselves as mixed use, seven-day-a-week destinations.
With the five-day-week office environment rapidly becoming a thing of the past, the need to reinvent CBDs with a variety of uses, extended trading times and the repurposing excess office space has seen The City of London Corporation and Canary Wharf Group actively promote their areas as locations for alternative uses, with the latter repositioning itself not only as a new life sciences hub as part of the Golden Triangle with Oxford and Cambridge, but also as a place to live, stay and play.
In its latest move in October, Canary Wharf Group agreed a deal with Imbiba, a specialist UK-based leisure, lifestyle, and entertainment investor, to open a 65,000 sq ft hotel, restaurant, and music venue at 12 Bank Street. The building is located at the heart of Canary Wharf and will open in 2025 housing several of Imbiba’s brands including a 78-bedroom House of Gods Hotel; an Amazing Grace music venue; a new events facility to be operated by Camm & Hooper; and a rooftop bar overlooking Eden Dock.
Earlier this year, Imbiba closed its Imbiba Fund II oversubscribed at £90 million and with a remit to invest in leisure, lifestyle, wellness and entertainment.
That demonstrates strong confidence in Imbiba and the broader UK leisure, lifestyle, wellness, and entertainment sectors says Imbiba Managing Partner Darrel Connell: “Fund II positions us uniquely to support even more prominent entrepreneurs and best-in-class high-growth businesses. We're very grateful to our ever-growing and loyal base of investors who share our commitment, understanding and enthusiasm to this dynamic and exciting sector.”
Canary Wharf Hotels
Central to the Canary Wharf scheme is the third House of Gods boutique hotel and the first outside Scotland, following the debut of the brand close to the Royal Mile in Edinburgh, followed by a 28-room hotel in Glasgow’s Merchant City district earlier this year. The original four-star hotel has 22 rooms and a cocktail bar. Imbiba companies also include Farmer J, Pizza Pilgrims, F1 Arcade, 1Rebel, Little Houses Group and Clays.
And a recent Reuters report suggested that as many as 30 hoteliers were discussing the possibility of redeveloping redundant office space within the Canary Wharf estate.
For its part Eden Dock is another recent initiative, described as an “urban oasis” providing access to the water and green spaces designed to enhance biodiversity at Canary Wharf. Created in partnership with the Eden Project, CWG is promising that Eden Dock will enhance the way people experience the Wharf, with verdant new public spaces and planting both under and around the dock’s waters.
“Imbiba will deliver a spectacular new 65,000 sq ft hospitality and leisure venue at Canary Wharf. Their line-up of world class brands will further enrich the provision of evening entertainment, provide event venues, and bring another hotel to the Wharf. We continue to enhance the offer at Canary Wharf across retail, leisure, hospitality, and competitive socialising to curate a thriving seven-day destination for all those who work, live and visit the wharf,” says CWG Managing Director of Retail, Leisure and Hospitality Stuart Fyfe.
“Visitors to Canary Wharf are at an all-time high, 7.5% up year to date compared to 2023 which saw 67.2 million visitors and we continue to see strong demand across our retail, leisure and hospitality offer with 97% occupancy,” he adds.
City Encourages Mixed-Use
Meanwhile, the City of London Corporation has set out a fresh vision for the Square Mile which includes adapting to post-pandemic changes in office demand and making it simpler and quicker for property investors and developers to propose change of use, notably in the hotel, educational and cultural sectors.
Those new priorities have attracted a fresh wave of investors, from budget hotel specialist Premier Inn to student accommodation and mixed use investors, and last year major applications for residential and hotel schemes accounted for nearly a quarter (23%) of the total, compared with just 8% in 2021, according to City of London data.
In terms of hotels, total beds available within the City are estimated at around 7,500 but by 2040 this could be nearer 9,000 and many of the early change-of-use projects have focused on hotels. Whitbread-owned budget hotel group Premier Inn recently acquired the freehold to the 89,700 sq ft office, retail and restaurant building New London House at 6 London Street, from clients of Orchard Street Investment Management, for £56.5 million. It comprises a podium and tower adjacent to Fenchurch Street train station and will converted into a hotel-led, mixed-use development.
Whitbread has also repurposed two former office buildings into Premier Inn and hub by Premier Inn hotels, and has another two developments ongoing at Farringdon and Moorgate.
One of the earliest hotel conversions to be approved was at 15 Old Bailey, which opened this August following a £34 million investment as the 111-room Hyde London City in a development by OB Capital and private equity firm Boscalt Hospitality. The project was designed by Studio Moren and also includes a destination bar and restaurant.
Meanwhile, LaSalle Investments has put 29 Clements Lane, EC4 up for sale through agent Savills for £30 million, positioning it as a possible hotel conversion, while developer Dominus is working on a number of conversions including a new 237-room hotel, also designed by Studio Moren, within a former office building at 5-10 Great Tower Street.
Add to these a number of student accommodation projects to service several London universities and the inclusion of a 30,000 sq ft Migration Museum within one of the projects, and the rebalancing of the City of London offer is set to change further and rapidly.
Through its planning powers for the City of London and with CWG’s ownership of a large, managed estate, both organisations have been able to leverage their controlling positions to spearhead major shifts in direction. Not only are they likely to look very different within the next five years, but they point to the possible end of the office-only CBD model.