London financial services workers return to their desks in droves

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On the lower floors of HSBC Holdings Plc’s Canary Wharf headquarters, offices are filling up.

Traders, vendors and close support staff who are not currently in the office have been told they should be at their workstations on the second and fourth floors of the tower five days a week, people familiar with the matter say. . The only exceptions will be for domestic emergencies and unavoidable family commitments.

This is a sign that after several false starts, the return of finance is finally accelerating. Over the past two weeks, trains have at times been the busiest since the start of the pandemic, as the streets were once again filled with workers. The City of London and Canary Wharf might not be where they were before the pandemic, and staff may only come a few days a week – but a turning point has been reached.

The Citigroup Inc. skyscraper reached more than half of the typical attendance before the pandemic in early September, while attendance at JPMorgan Chase & Co. rose to 40%, from about a quarter in August, according to people familiar with the matter. Goldman Sachs Group Inc.’s office occupancy rate is currently around half and the proportion continues to rise, another person familiar with the matter said.

As New York’s reopening is hampered by an increase in cases of the Delta variant of the virus, London’s own peak has receded over the summer. Although daily Covid infections remain relatively high in the UK – with over 200,000 new cases reported last week – the government considers the current pressure on the NHS manageable and touts a new phase of the pandemic with more than individual choice and freedom.

A queue outside Porterford Butchers in London, September 13, 2021. Photo credit: Hollie Adams / Bloomberg

On the strength of this message and the start of the new school year, more and more employers are encouraging staff to come and work at least a few days a week. These newcomers are increasingly visible in the maze of streets that make up the heart of the City of London, home to approximately 542,000 jobs.

At a midweek lunch at Porterford Butchers, a favorite takeaway spot, the queue for their short-rib beef baguettes meandered down Watling Street past lager drinkers wearing waistcoats in the sunshine of late summer. Across the Bank of England, the Square Mile insurance district is also buzzing.

At Lloyd’s of London Managing Director John Neal was applauded by the signs of life in the region, saying the insurance market siege is now at its highest level since the UK’s first lockdown in March 2020 .

“There’s still a long way to go, but September really feels like going back to school,” Neal said. “We hope to see a steady and gradual increase as the fall approaches.”

Pedestrian traffic

Across the city of London, foot traffic was estimated at 39% of the pre-pandemic norm on September 15, according to an analysis by Orbital preview, which monitors activity levels via satellites and mobile phone data. In Canary Wharf, office worker footfall is 36%. Both are the highest since the days leading up to the pandemic.

As attendance increases, face-to-face meetings are starting to make a comeback. Investors from companies such as Allianz Global Investors, Legal & General Investment Management and Church House Investment Management said companies were starting to offer them the choice of face-to-face meetings and video meetings after virtual presentations for initial public offerings became the norm during the pandemic.

Business is on the rise at The Ned, the City of London branch of the owner of Soho House Membership Collective Group Inc. Last week, the member hotel-restaurant-club recorded weekly sales of over £ 1million ( $ 1.4 million) for the first time in 18 months, according to Gareth Banner, its chief executive.

FOMO Banker

“There is an element of FOMO,” Banner said, referring to the fear of missing out. “If a broker is entertaining a client and there is a rumor that Company X is hosting in-person events, others should feel that they are not going unnoticed and that they are entertaining and engaging their clients in the same way. . “

Sue Knowler, whose family owns and operates Sweetings, the small seafood restaurant that’s a lunchtime favorite for many of the town’s financiers, also said business was on the rise even though the covers were still working. at half of their pre-Covid level.

This increase is good news for the vast urban economy of restaurants, shops and bars for so long supported by the half a million commuters who entered the city every day of the week.

Some office environments also look more like normal. While masks remain a staple inside the buildings of most major banks, some are starting to reverse their pandemic policies – and their benefits.

Goldman Sachs dropped social distancing rules in its London office this week. It also ends free meals at the office from September 20 “to encourage support for local restaurants and businesses that are reopening around us”.

That’s not to say that workplaces will return in 2019, especially outside of offices housing traders and traders.

Outside of the HSBC trading room, hybrid work is in full swing for most of the bank’s London-based employees. Even managers like CEO Noel Quinn and CFO Ewen Stevenson are working on a newly renovated floor after the bank tore up its executive suites, including Quinn’s corner office.

Workers in the elevator at Lloyd’s in London. Photo credit: Hollie Adams / Bloomberg

Lloyd’s CEO Neal said that with many companies looking to reduce their office presence in the city, the insurance market has had to adapt.

“Whether physical or virtual, our goal is to ensure that Lloyd’s continues to be the space to meet, come together and transfer risk,” he said.

And with many unknowns lurking, a global return to full occupation remains a distant prospect for city centers around the world. As of mid-September, only 1% of workplaces were more than half full, according to an analysis by workplace optimization company Freespace, which has more than 100,000 sensors in offices around the world. .

This means that even those who support the latest return of finance to the office cannot say what their workplace will look like in the future.

“We’re just trying to encourage people to come back,” said Sam Smith, CEO of FinnCap Group Plc, noting that around 80% of the London-based broker’s staff chose to come back because she asked employees to come over. Tuesdays, Wednesdays and Thursdays.

“What we’ve learned over the past 18 months is that you can’t really plan.”

–With help from Swetha Gopinath.

Copyright 2021 Bloomberg.

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