KEY POINTS

  • The City of London Corp. wants the area to be reorganized as a hub for startups, small businesses and arts centers
  • The City also wants offices in the district to be redesigned to allow for remote working and social distancing
  • New York’s Wall Street – similarly decimated by the pandemic – may also need reinvention

The COVID-19 pandemic has turned financial districts around the world into ghost towns, prompting local officials to plan for a brave new post-pandemic world.

The City of London Corp., which governs London’s famed financial district, wants the area to be reorganized as a hub for startups, small businesses and arts centers.

By 2025, the City is targeting that at least one-fifth of new office tenants in the area should comprise small businesses.

The City also wants offices in the district to be redesigned to allow for remote working and social distancing, if necessary. In addition, in view of climate change, the City wants to make it easier for workers and residents to walk or bike through the streets.

At present, a majority of City financial employees are still working remotely – many may never return to offices. As such, the City warned, London will have to “reinvent itself” after the pandemic.

“London is today facing major challenges. Coronavirus, the U.K.’s exit from the European Union and increasing protectionism across the globe are all threats to the capital’s role as an international business hub,” said Catherine McGuinness, policy chair at the City of London Corp. “We must reimagine London in order to seize the moment.”

New York’s Wall Street, which has similarly been decimated by the pandemic, may also need reinvention.

As early as May, Moody’s predicted that many New York companies could follow their employees to cheaper digs outside the city. Thus far, there hasn’t been a large exodus of firms.

“People are doing a lot of looking around and seeing what’s available but there has been very little momentum and decision-making,” Nicole LaRusso, director of research and analysis for CBRE, told Commercial Observer. “We’ve been watching closely to see if this trend is materializing, and so far it has not. It’s an evolving situation.”

For now, most New York-based firms also seem satisfied with the production of their homebound employees.

“There are many questions about work from home over the long horizon but the question of whether it works over a shorter horizon has been answered,” said Gabe Marans, a senior managing director at brokerage Savills. “Most industries, including tech, publishing and finance have maintained a wait-and-see approach [on remote work].”

Commercial Observer noted that while some Manhattan-based companies have relocated to places like New Jersey and Connecticut, others are seeking to downsize office space in New York City.

“If you’re only going to have executives and management go to the office, then you wouldn’t need as much space,” said Jason Price, the tri-state suburban director at real estate company Cushman & Wakefield.

Nicholas Bloom, a professor of economics at Stanford University, told International Business Times what some companies might do with their now nearly empty properties.

“Convert some floors of commercial property buildings into residential,” he said. “This would help to address the peak-load problems on elevators.”

The problem with skyscrapers, Bloom noted, is elevators – with social distancing you can’t have everyone in at peak times.

“So you need to do what airlines do, which is charge more during busy times,” he offered.

There are also opportunities to build on, according to Paul Stapley, vice president at Montreal-based consulting firm WSP.

"Companies could see this as an opportunity to downsize, to reduce operating costs and invest more in technology. Occupiers have already been moving to shorter lease terms. If they’ve only got, say, six months left, they may decide to walk away," said Stapley.