LONDON, April 4 (Reuters) - Office vacancies in London's

Canary Wharf district have reached a record high and could hit

as much as 30% in the coming years if the area cannot find

tenants to fill 2 million square feet of space becoming vacant,

according to property data firm CoStar ( CSGP ).

The east London financial district is struggling to recover

from a pandemic-induced drop in demand, even as other central

areas of the city and prime locations globally from New York to

Paris show signs of recovery.

The former docklands area was transformed from the late

1980s onwards into a cluster of towers occupied largely by

banks, but has suffered recently as some major tenants such as

HSBC ( HSBC ) opt to move nearer the city centre.

Vacancies in the "Docklands Core" area - which incorporates

Canary Wharf and part of the surrounding Isle of Dogs peninsula

- hit 18.6% last month, the highest recorded level in data going

back to 2003, CoStar ( CSGP ) said.

That vacancy rate was 9.8% in March 2020 and 3.5% eight

years ago. By contrast, the latest vacancy rates in the City and

West End were 9.8% and 7.6% respectively, CoStar ( CSGP ) said, adding

the figures were preliminary.

Planned Canary Wharf departures including HSBC ( HSBC ) - which

leaves its 45-storey office in 2027 - could push the rate to

30%, CoStar ( CSGP ) said, though that estimate was based on none of the

vacated space being filled.

Canary Wharf Group (CWG), which manages much of the area and

is owned by Brookfield and the Qatar Investment

Authority, has said it is diversifying its tenant mix and

looking at repurposing some offices for other uses, as is

planned for the vacated HSBC ( HSBC ) skyscraper.

CWG declined to comment.

Canary Wharf is also undergoing a multi-year transformation,

including development of new flats, hotels, laboratories and a

theatre.

Big banking tenants Citi, Morgan Stanley ( MS ) and

Barclays ( JJCTF ) have committed to staying, while Fintech Zopa

recently announced a move to the area.