The value of development at the Docklands, Canary Wharf has fallen dramatically fallen by 40% in light of the credit crisis and hardly hit tenants such as the Lehman Brothers, Citigroup and other major leaseholders. British Land Co. Plc, London's prevalent office landlord, cut the value of its venture in Canary Wharf by 40 percent as the credit disaster trapped tenants there including the infamous Lehman Brothers.
The U.K.'s second biggest real estate investment trust owns an 11 percent interest in Canary Wharf through its stake in Songbird Estates Plc. British Land said the value of that stake as of Sept. 30 was 112 million pounds ($168 million), according to a statement yesterday. Shares of both companies have fallen today, November 20th, 2008.[1]
However, the news is not all that bad for Canary Wharf, as JP Morgan has just become Canary Wharf’s largest tenant. The US banking giants have conserved the deal on a £247m land acquired to build their own 1.9m square foot organization space development in London’s Docklands. JP Morgan has signed a 999-year lease for Canary Wharf’s Riverside South site, which will be home to the company’s new European Head office.
This great deal will boost canary wharf and in real terms save it from becoming a ghost town. It will provide a real boost to the UK commercial property market as concerns grow that the financial crisis will cause financial services group to downsize their business space in London as profits plunge and jobs are axed.[3]
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