Home / Companies / Inside London’s Docklands: 40 years of ambition, politics and financial wrangling

Inside London’s Docklands: 40 years of ambition, politics and financial wrangling

In 1981, in the grip of what in retrospect I realise must have been a premature midlife crisis, I sold my three-bedroom south London semi for £65,000 and moved into a loft in Wapping. I left my Habitat kitchen and the stained-glass window depicting a galleon over the front door behind and moved into Metropolitan Wharf, a 19th-century Thames-side warehouse with 2,000 square feet of agoraphobia-inducing, wide-open raw space. It was big enough for an indoor bike ride.

Strictly speaking, my three-year, non-residential warehouse lease
prohibited me from living there. So I built a box in one corner to hide the
evidence of illegal habitation — in case of any unannounced visits from the landlord — installed a shower and hoped for the best.

I’d spent the previous summer in an artist’s studio in Tribeca, New York, and liked the idea of finding something similar in London, where loft living was not yet the phenomenon that attracted the attention of estate agents. It was still a precarious way of life for working artists that offered little security.

The warehouses of Wapping, still smelling faintly of spices, fitted the part. Metropolitan Wharf stood out. Its woodwork had been painted pillar-box red to distract from the crumbling brickwork. Its top floor, with the river view, had once been occupied by a colony of architects, including a youthful David Chipperfield. There was a specialist dealer in Dr Who artefacts on the floor below and a music-equipment hire business above me, with an earnest co-operative growing mung beans in the basement.

Deyan Sudjic; ‘On still summer nights, you could walk along deserted cobbled streets and glimpse a full moon through the haze hanging above the dark and silent river’ © Harry Mitchell for the FT
One Canada Square being built, 1990
The Canary Wharf tower, known as One Canada Square, under construction, 1990 — it was completed the following year  © Alamy

This was the year that the Royal Docks, the last of London’s upstream docks, closed; the final act in a process of continuous decline ever since the East India Docks had shut down in 1967, triggered by the invention of the shipping container. There was now a full seven miles of continuous dereliction all the way from Tower Bridge to Beckton.

The ships that once clustered around the wharves and the 25,000 jobs that went with them evaporated, leaving nothing but mirror-smooth basins, disturbed only by the occasional arc of a bird taking flight.

In Wapping, on still summer nights, you could walk to the Pier Head along deserted cobbled streets and experience the scent of the Thames and glimpses of a full moon over Tower Bridge through the haze hanging above the dark and silent river.

London Docklands: 40 years of transformation  London City Airport Opening in 1988, LCY grew from servicing 133,000 passengers in its first year to more than 5m before the pandemic One Canada Square This 235m office tower designed by Argentine-American architect Cesar Pelli was erected in 1991 and still stands as one of the UK’s tallest buildings today London City Island A 12-acre development home to 10 buildings, nearly 1,500 apartments and the English National Ballet’s new headquarters

A change was needed

When Michael Heseltine, then environment secretary, embarked on a massive experiment in 1981 by taking the area out of the hands of local government, it wasn’t just London’s docks that were dying. The capital itself had been haemorrhaging people for half a century. At 6.7m, London’s population was the lowest it had been since before the first world war, 2m fewer than at its peak.

Michael Heseltine, then environment secretary, talks to reporters about the Canary Wharf project in 1980
Michael Heseltine, then environment secretary, talks to reporters about the Canary Wharf project in 1980 © Getty Images

Tower Hamlets, Southwark and Newham were stripped of their planning powers in the 5,100 acres placed under the control of the London Dockland Development Corporation (LDDC). Heseltine appointed Reg Ward, who arrived from running Irvine new town in Scotland, as the LDDC’s chief executive.

Ward had an £80m-a-year budget with which to attract private investment into the area, and a barrage of incentives to offer. He established the Isle of Dogs Enterprise Zone with no land tax, no training levies, no planning restrictions, a 100 per cent tax write-off on capital costs and a 10-year tax holiday.

The Enterprise Zone itself was limited to a cluster of sites around the three West India dock basins on the Isle of Dogs, but the LDDC’s domain stretched from London Bridge in the west to the Beckton sewage farm in the east. Most of its territory was north of the river in Tower Hamlets and Newham, but there was also a riverfront fringe in Bermondsey, dropping south to Surrey Wharfs.

Bar chart of % change, 1981 to 2019, top boroughs and London aggregate showing The Docklands boroughs have had some of the fastest population growth since the 1980s
Chart showing how the Docklands boroughs have experienced a resurgence since the nadir of the 1980s

The supremely pragmatic Ward claimed not to have a master plan, but took decisions bit by bit, so as to create “a plan that might only make sense in hindsight”, he told The Times in 1986. The best Ward and his team could envisage in the early years was suburban-style private house building and low-rise industrial sheds. That was the Docklands I moved into.

Heseltine recently told me: “If I had made a speech then about what we were planning to do about London’s Docklands, predicting everything that has happened there — Canary Wharf, the Dome, the Exhibition Centre, the Olympics, the high-speed rail link, London City airport — they would have sent the men in white coats and had me locked up.”

The response from the local authorities — and Ken Livingstone’s soon-to-be-abolished Greater London Council — to what they took to be an assault on local democracy was furious. The local authorities mostly refused to deal with the LDDC.

And both sides spent lavishly on propaganda billboards that populated the gap sites between the corrugated iron fencing and the empty buildings. “It will feel like Venice and work like New York,” declared the LDDC. The GLC response was to warn: “Big money is moving in. Don’t let it push out local people.”

Despite the protests, Ward ploughed on. He funded the building of the Docklands Light Railway (DLR) to bring people into the area. An airport followed in the Royal Docks.

And then one day in February 1985, something extraordinary happened.

A new financial centre

Michael von Clemm, who combined being chair of the Credit Suisse First Boston investment bank in London with a role on the board of Le Gavroche
restaurant, was invited down to Canary Wharf for lunch by the LDDC. The Roux brothers wanted to invest in a new cold store in the area.

Von Clemm, who also maintained a parallel career as an anthropologist at Oxford and played an important part in establishing the Eurobond market, had the insight to realise that Canary Wharf’s tax incentives and lack of red tape could be used to build skyscrapers as well as sheds.

Margaret Thatcher, prime minister at the time, is shown a model of the Canary Wharf development
Margaret Thatcher, prime minister at the time, is shown a model of the Canary Wharf development by Paul Reichmann, head of developers Olympia & York, She promised to fund the Jubilee line extension of the London Underground and even offered to move civil servants into offices there © PA
View from Wapping to Canary Wharf
View from Wapping to Canary Wharf © Harry Mitchell for the FT

Which is why three years after that lunch, I found myself on the floating gin palace that Olympia & York, a Canadian property company owned by the Reichmann brothers, chartered to ship journalists down the Thames to watch Margaret Thatcher, the prime minister, unveil its scheme for Canary Wharf.

She wore a Prince of Wales check suit jacket with improbably cantilevered shoulder pads. The bar on the boat had a whole table full of portable telephones charging for the Reichmann entourage. It all felt eerily like an out-take from The Long Good Friday, which starred Bob Hoskins as an East End villain trying to go legitimate by developing the docks with American money.

Getting this far had been a white-knuckle ride. Von Clemm funded
the flamboyant American developer G Ware Travelstead to plan a vast office scheme for Canary Wharf. Arthur May, a New York architect, designed three 60-storey office towers using a book on Hawksmoor churches that he kept by his desk for reference. But von Clemm moved on to Merrill Lynch, and Travelstead’s scheme was unfundable.

By this time, the LDDC could not afford to see Canary Wharf’s redevelopment fail. Christopher Benson, the corporation’s chair, called Paul Reichmann to persuade him to take over the project. Heseltine relishes his memory of watching a famously non-interventionist prime minister joining the effort. She spoke to Reichmann personally, promised to fund the Jubilee line extension of the London Underground and even offered to move civil servants into offices there.

What really attracted Olympia & York was a simple calculation. In 1980, Tokyo had 400m sq ft of prime office space; New York had 300m sq ft; but London had just 160m sq ft.

Line chart of Average residential sale price in Docklands postcodes (£'000s in constant 2020 values) showing Property prices in the Docklands areas have grown unevenly over the past 25 years

Because the City of London’s planners ruled out high-rise buildings, insisted on keeping the existing street pattern and preferred new buildings constructed behind existing facades, when the financial Big Bang in 1986 ended the Bank of England’s insistence that banks stay in easy walking distance, Canary Wharf looked a natural alternative.

But since the City of London was wily enough to have seen off every threat to its existence from Wat Tyler to King Charles I and the Great Fire of 1666, the City Corporation executed a handbrake turn in planning policy. It flooded the market with office consents.

Olympia & York struggled, and was eventually pushed into bankruptcy. George Iacobescu, the engineer who had been brought in from Canada to oversee construction for the Reichmanns, once told me that he had spent his first day in London walking all the way from his hotel to Canary Wharf to see for himself just how much of a problem they would have attracting tenants. Battery Park, which the Reichmanns built in New York, is just 15 minutes’ walk from Wall Street. Canary Wharf is 4 miles from the Bank of England.

“Why does it have to be so tall?” the Prince of Wales once inquired of Cesar Pelli, architect of the original Canary Wharf tower. The answer, which Pelli was too polite to give, was obvious. Canary Wharf needed an unmissable signpost.

Pelli’s svelte, postmodern tower, with its steel skin designed to reflect changing London skies, initially proved hard to fill. It became a kind of vertical Fleet Street, with The Telegraph, The Independent and The Mirror taking floors at bargain rates. Some have since moved on.

In 1992, Olympia & York went bust, owing $20bn. It took Paul Reichmann three years to raise the money to buy the development back from the banks, and he began building more towers, a process that has continued under successive owners ever since.

The Economist reports that Canary Wharf accounts for 67,000 finance sector jobs, putting it ahead of Frankfurt as a banking centre. And it’s no longer an office monoculture. Count in the hotels, shops and restaurants, and Canary Wharf employs around 120,000 people — or it did before the pandemic arrived.

As for the LDDC, that was dissolved in 1998. Michael von Clemm, who died in 1997 aged just 62, is memorialised by a bronze relief unveiled by Eddie George, the former governor of the Bank of England, that stands beneath Canary Wharf’s tallest tower.

On its 35th floor is a space that feels like the map room from Raiders of the Lost Ark. It is full of huge models with which the current owners, a combination of the Qatari government and Brook­field Property Partners since 2015, plan the next steps in the development, which has spilled beyond the original site and concentrates on residential property.

Docklands life

In fact, well before Canary Wharf became an alternative financial centre, the LDDC had succeeded in attracting housebuilders to the Docklands. The pioneers in the early 1980s lacked shops, restaurants or schools, but they did get amazing river views and postmodern architecture, such as China Wharf, designed by Piers Gough, completed in 1983 and now a listed building.

It was the start of a ripple effect extending south of the river eastward beyond the LDDC’s original area into the Greenwich Peninsula, selected for the building of the Millennium Dome, now the O2 Arena, and the Millennium Village, where the Anglo-Swedish architect Ralph Erskine designed a colourful 12-storey block on the river in 1999.

The Docklands Light Railway under construction, July 1987
The Docklands Light Railway under construction, July 1987 © Getty Images
Wapping today, where Deyan Sudjic lived in the 1980s
Wapping today, where Deyan Sudjic lived in the 1980s © Harry Mitchell for the FT

After decades in which high-rise tower blocks were synonymous with social deprivation, they became popular with luxury developers — many from overseas. Knight Dragon from Hong Kong is now completing the so-called Greenwich Design District, a collection of 16 new buildings that will provide flexible work space to local creatives.

On the north side of the Thames, Irish developer Ballymore — which, after a blaze at its New Providence Wharf building on the Isle of Dogs, faced protests from flat owners over costs to fix fire safety issues — is completing the 10 residential buildings that make up London City Island on the Leamouth Peninsula in a joint venture with EcoWorld International.

Even the Canary Wharf company itself is building residential towers, such as the 58-floor tower One Park Drive, by Herzog and de Meuron, architects of the extension to the Tate Modern. One-bedroom flats start at £840,000.

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Today, Canary Wharf is emerging from the lockdowns and wondering if anybody will come back. London City Airport, ‌closed‌ ‌for‌ ‌three‌ ‌months, ‌ ‌is‌ ‌open‌ ‌again, though‌ ‌operating‌ ‌a‌ ‌small‌ ‌fraction‌ ‌of‌ ‌the‌ ‌flights‌ ‌that‌ ‌it did ‌before.

By the time of the millennium, the population of Greater London had made up for its losses since 1938. Subsequently, it is widely believed that it saw its first drop during the pandemic.

Metropolitan Wharf, where I lived, is fully legal now, and its open spaces have been subdivided within an inch of their lives. I swapped loft life in 1984 for the white stucco terraces of Maida Vale, where you could see trees and pedestrians.

Deyan Sudjic is a writer and broadcaster and the director emeritus of London’s Design Museum

Data visualisation by Steven Bernard and Keith Fray

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