Canary Wharf
Staff posted on October 17, 2006 |

The London Docks
, after being once the largest and most important ports in the world, employing hundreds of thousands of people, crashed down in the 1960's as shipping companies sought bigger and more efficient ports. In 1981, 8.5 sq. miles (2,201.5 hectares) lay unused & useless.

The British government, then headed by Margaret Thatcher, created a program to restore the important east section of London. "The London Docklands Development Corporation's aim was to secure lasting physical, economic, and social regeneration by offering incentives to employers and establishing an attractive working environment." The Canary Wharf project, they figured would do the job perfectly.

Canary Warf
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Cesar Pelli's design for the project included a huge centerpiece. One Canada Square was to be a massive 800 feet high, glass and steel structure, topped off with a 130 foot stainless-steel louvered pyramid illuminated at night to be instantly recognizable on the London skyline. The structure was built able to withstand 75 mph (121 kph) winds, and although it was simple and "uncreative" according to some people, was an architectural achievement none the less.

Canary Wharf was the brainchild of Paul Reichmann, the Canadian real estate titan who, late in the 1980s, saw the need for more affordable first-class office space in London. What he did not anticipate was the deflationary environment in which his buildings would come on the market. In the early 1990s debts pinched and office buildings stood vacant—even ones so well designed and commodious as Reichmann's own.

It did not help Reichmann that Canary Wharf was inaccessible without the public transportation that London did not immediately build for him. It was even less convenient that the commercial paper market said no to Reichmann when his real estate company absolutely had to have liquidity. Thus, in 1992, Canary Wharf fell into "administration," the British equivalent of Chapter 11. Reichmann, formerly at the pinnacle of the real estate world, suddenly found himself on the ground floor. Too bad, people said, that he had to go out a failure.

But he refused to go out. He never relinquished the specific and valuable knowledge of the tax rules and zoning ordinances that would enable Canary Wharf to compete so successfully with other London properties. The banks that foreclosed were only too happy to share their burden with an investment group that Reichmann got together in 1995. Being banks, they viewed the asset on which they foreclosed as a mistake, not an opportunity. That opportunity was presented to the global equity markets in 1999. Now Canary Wharf Group commands a market capitalization of $5.1 billion, which is 66 times last fiscal year's net income. Reichmann, for his courage and inextinguishable vision, owns 4% of the company.

Canary Wharf 2
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Canary Wharf 3
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Canary Wharf 4
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