Songbird Estates said today that it would press on with the construction of the 200,000 sq ft Canary Wharf HQ for Bear Stearns, in spite of uncertainty over the future of the bank following its acquisition by JP Morgan.
The holding vehicle and majority shareholder of Canary Wharf Group said the development at 5 Churchill Place would continue to the original timetable, which would see the building finished and Bear Stearns take occupation next year.
‘There is a contractual obligation, and Bear Stearns are legally committed to take up occupation,’ John Garwood, company secretary of Songbird, told Property Week. ‘If JP Morgan is taking on Bear Stearns then they take on that obligation.
‘No crisis talks’
‘We have been in contact with JP Morgan since the takeover of Bear Stearns was announced. There have been no dramatic crisis talks, just normal contact on a day to day basis.’
Garwood was bullish about the prospects for Canary Wharf in 2008, despite the fact that Songbird revealed an 18.6% fall in adjusted net asset value to £2.15p a share in 2007. Songbird put the fall down to dividends of 70.5p a share paid out during the period, as well as a fall in the carrying value of its portfolio.
Overall, the investment portfolio increased in value 2.2%, but fell 4.2% in the second half to £6bn.
Rents holding up well
Garwood said that rents had held up well despite the uncertainty in the financial markets, with its letting to Barclays Capital in April 2007 having an average rent of £46/ sq ft and its recent letting to Moody’s having an average rent of £45.50/sq ft.
Garwood also said that the group was continuing with its plans to expand its presence in the City of London, and was looking at other schemes on top of its current Drapers Gardens joint venture with Exemplar.