London's Canary Wharf plans life sciences tower as finance retreats

LONDON (Reuters) - Canary Wharf Group is planning to build a 23-floor tower for the life sciences industry which it says will be Europe's biggest such construction, as the London hub aims to diversify from a financial industry in retreat.

Canary Wharf Group (CWG) said on Tuesday the 823,000 square foot development will contain laboratories and workspaces, and is being built with Kadans Science Partner.

"We have been developing our vision for a world-class life sciences hub at Canary Wharf since 2019, and this is a significant milestone in our journey," CWG Chief Executive Shobi Khan said.

The building comes as financial services companies looking to cut costs are reducing their presence in Canary Wharf, a regenerated district that was formerly London's docklands area but now houses big banks such as Barclays and HSBC.

HSBC is reviewing whether to keep its global headquarters in the Wharf, Reuters reported in September, citing an internal memo.

Ratings agency Moody's put CWG's debt on review for a possible downgrade earlier this month, citing a possible 10-15% drop in office values over the next 18 months.

The coronavirus pandemic has conversely lifted interest in offices and laboratories dedicated to life sciences to a new level, Reuters reported in April last year.

Although less than 1% of European real estate investment is in life sciences, according to a recent report from the Urban Land Institute, strong government and venture capital investment in the sector is encouraging piggy-backing by real estate investors.

The Financial Times, which earlier reported the new life sciences tower, said the development could cost 500 million pounds ($615 million). CWG did not immediately respond to a request to confirm that figure.

($1 = 0.8135 pounds)

(Reporting by Lawrence White; Editing by Mark Potter)