Bloomberg News

Songbird Profit Rises as Tenants Rent More East London Space

March 22, 2013

Songbird Estates Plc (SBD), the property company that controls the Canary Wharf financial district in east London, said full-year profit rose after it leased more space. The shares rose the most since Jan. 7.

Underlying profit before tax increased to 23.3 million pounds ($35.4 million) from 4.6 million pounds a year earlier, the London-based landlord said in a statement today. Adjusted net asset value per share rose 5.5 percent to 210 pence as of Dec. 31 from 199 pence on June 30.

Songbird, owner of London’s largest development pipeline, has a 69 percent stake in Canary Wharf Group Plc, which has been expanding outside the business district of the same name. The company plans to lease more space to technology and media companies and plans to develop office buildings for them as well as 3,000 homes at the 20-acre Wood Wharf site next to the financial district.

“The group is prioritizing market driven, more focused developments including the major regeneration plans that are being put in place for Wood Wharf,” Chairman David Pritchard said in the statement. “The group plans to capitalize on the global status of London as a business center and to attract and target growing business sectors; particularly technology and new media firms.”

Songbird rose as much as 6.6 percent in London trading, the most since Jan. 7. The shares were up 4.8 percent at 141.75 pence as of 9:24 a.m.

Wood Wharf

Songbird will probably develop homes at Wood Wharf before it builds the office space, Company Secretary John Garwood said in a call with reporters today. A masterplan is due to be submitted for planning approval later this year, he said.

Canary Wharf may exercise its right to buy Riverside South, the site owned by investment bank JPMorgan Chase & Co. since 2008, if it comes on the market, Garwood said. A bid would depend on the asking price, he said.

The company has the right of first offer if the land is put on the market before October 2016, according to today’s statement. Berkeley Group Holdings Plc (BKG), the U.K.’s third-largest homebuilder by market value, is interested in buying the land for the development of condos, Property Week reported Feb. 22.

Canary Wharf plans to redevelop most of Royal Dutch Shell Plc (RDSA)’s London headquarters near Waterloo train station in a venture with Qatari Diar Real Estate Investment Co. It has had approaches from investors looking to buy buildings before their completion, Garwood said. He declined to comment on whether the approaches had come from existing shareholders.

Qatar, China

Songbird’s largest shareholders include Qatar Holding LLC, investor Simon Glick of New York, a unit of China Investment Corp. and funds managed by Morgan Stanley (MS:US), according to data compiled by Bloomberg. Its market value is more than 1 billion pounds.

The value of Songbird’s retail portfolio rose 9.9 percent last year, compared with a 2.5 percent increase in the office portfolio. The value of the company’s buildings and land increased 4.1 percent over the year when adjusted for the purchase of Wood Wharf and spending.

To contact the reporter on this story:

Neil Callanan in London at ncallanan@bloomberg.net.

To contact the editor responsible for this story: Andrew Blackman at ablackman@bloomberg.net.


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