London beyond the Pandemic: Financial Hub
On street level, London’s financial district is a shell of its former self. No one is rushing to meetings. Chairs are flipped upside down on tables inside shuttered cafes and bars. The roads are ghostly quiet for a bright spring morning.
But underneath the streets is a hive of activity, as builders lay the groundwork for the latest skyscraper to transform London’s skyline. Developers of the tower, called 8 Bishopsgate, are confident that when construction finishes late next year, workers and firms will return to fill all 50 floors of the gleaming new office space.
When the pandemic struck, almost 540,000 workers vanished from London’s business hub almost overnight. A year on, most haven’t returned. While many believe increased home working will become the “new normal”, city planners say they aren’t worried about empty office blocks. Rather, they say that the uncertainties and changes are just a catalyst for the reinvention of one of the world’s top financial centers.
“We’re very clear that the office is not dead, from all that we’re hearing,” said Catherine McGuinness, head of policy at the City of London Corporation, the governing body of the historic financial district.
“(Businesses) are telling us that they’re really keen to get back to their offices, but they’ll use it in a different way,” she added. “They’ll build on some of these new ways of working that they’ve learned.”
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Plagues, fires, war — London has survived them all. But it has never had a year like this. The coronavirus has killed more than 15,000 Londoners and shaken the foundations of one of the world’s great cities. As a fast-moving mass vaccination campaign holds the promise of reopening, The Associated Press looks at the pandemic’s impact on London’s people and institutions and asks what the future might hold.
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It’s been a year like no other for the City of London, the ancient core of the capital and historically its wealthiest and most powerful. Nicknamed the Square Mile, a reference to its size, the business district sits within the Roman walls of Londinium, the original London founded on the banks of the River Thames around 50 AD.
A January report on London’s future from the mayor’s office predicted that while companies will not abandon the city, many businesses will need to improve the quality of their office space to encourage more employees to return and use it.
The return of the workers will be crucial for the long-term survival of many of London’s shops, restaurants, theatres and museums. Although offices and city centers all over the world have emptied out during the pandemic, officials say London has been hit particularly hard by the shift to remote working because it has a much smaller number of people living in the core of the city compared to places like New York or Paris.
Hubert Zanier, who co-owns a chain of Southeast Asian takeaway restaurants called Nusa Kitchen in the financial district, has struggled to keep his business afloat with all six branches closed. While technically allowed to open under the government’s coronavirus restrictions, it was clear this was not an option with zero footfall in the City.
“We were quite hopeful when we first closed down, but little did we know the whole thing would last 12 months with all the ups and downs - more downs than ups,” he said.
Zanier is now preparing to reopen as restrictions gradually ease in England, and his best-case scenario is for 75% of workers to return on a regular basis from the summer.
“It’s clear the world will look different,” he said. “But you have to be optimistic- if you’re not you might as well pack up your stuff and go.”
While firms like Amazon recently stated that they plan a return to an “office-centric culture,” many studies have suggested that more flexible working policies and increased remote working are here to stay.
Like many others, Smriti Jha, a project manager in an investment bank, has barely set foot in her office since last March. The 45-year-old single mother has recently changed jobs - she was interviewed and hired on Zoom - and her new workplace has no return to office plan. She does not miss the crowded subway commute, and now sees a five-day week in the city as “a bit excessive.”
“Before the pandemic, it was generally working moms who choose to work from home,” she said. “There was always this kind of sense of stigma - it’s like, well, are they actually working or not? But I think that’s being blown away.”
For now, office developers and investors say they aren’t worried. Although office leasing slumped to record lows last year as many businesses re-assessed their needs, demand appears to have bounced back.
McGuinness, at the City of London Corporation, say that in the first three months of the year alone, the body has already approved the equivalent of 80% of the number of planning applications for office space submitted last year.
On Bishopsgate, two new skyscrapers smack next to each other are set to open soon, and each stress they are armed with spacious offices and a host of amenities to entice workers back.
At 62 storeys tall, 22 Bishopsgate is the second-tallest tower in the U.K. and dwarfs everything else in the vicinity. Billed as “Europe’s first vertical village,” it boasts a huge food hall and a gym, and 60% of its office space has already been pre-let to companies ahead of its opening in the autumn.
Together with its neighboring tower at 8 Bishopsgate, the two will offer enough space for some 17,000 workers.
Kevin Darvishi, leasing director at Stanhope, the developer behind 8 Bishopsgate, said demand for top-quality office buildings will remain strong in the post-COVID world. “What you’d end up with is a two-tier market where older buildings are discounted considerably because they can’t cater to the needs of the next generation of the workforce,” he said.
In a broader sense, officials say the pandemic has also accelerated existing plans to make the financial district a friendlier, more diverse place that give people a reason to stay after work.
More space for pedestrians and cyclists are planned, as well as more affordable or flexible workplaces that can attract people from the creative industries. By 2025, the City of London wants to see a 50% increase in weekend and evening visitors.
“It’s always changing in the City,” McGuinness said. “This will be a new evolution.”