Songbird, the AIM-listed company which owns a majority stake in Canary Wharf, risks breaching its banking covenants on an £800m loan from Citigroup because of plunging property values.

Independent valuers are putting the finishing touches to their valuation of the Docklands development ready for publication of Canary Wharf’s latest financial results.

Property sources said falling property values are expected to push Songbird close to its loan-to-value covenants on the Citigroup facility, risking a technical breach of the agreement.

The loan is secured against shares in Songbird, whose shareholders include Morgan Stanley’s Real Estate Fund, British Land and private investor Simon Glick.

Sunday Times