LONDON, April 3 (Reuters) - Morgan Stanley's ( MS ) UK

arm has extended a lease on its 547,000 square foot European

headquarters in London's Canary Wharf to 2038, committing to the

Docklands financial hub even as rivals relocate in search of

smaller offices.

In a statement on Wednesday, Morgan Stanley's ( MS ) Chief

Operating Officer for Europe, the Middle East and Africa (EMEA)

Chris Beatty said the U.S. bank was "looking forward to

witnessing the next stages of Canary Wharf's evolution first

hand".

"Canary Wharf has been the location for our EMEA

headquarters for over 30 years and we're pleased to be extending

that tenure," Beatty said.

Last June HSBC said it was quitting its 45-floor

skyscraper, one of the district's landmark buildings, for a

smaller, lower-rise property in the City of London.

The decision raised questions about whether Canary Wharf

could continue to hold onto the world's biggest financial

occupiers, but last December British bank Barclays ( JJCTF ) also

pledged to stay in its One Churchill Place tower until 2039.

Many of London's largest offices have emptied out since the

pandemic, with thousands of employees ditching long and

expensive commutes in favour of hybrid working patterns.

Top London-focused landlords are hoping that

environmentally compliant buildings in prime locations will earn

higher rents as tenants become more selective about their office

requirements.