QIA set to take over Canary Wharf owner

June 19, 2010 - 12:27:16 am

LONDON: Qatar’s sovereign wealth fund is set to take over Songbird, the listed owner of Canary Wharf, as the country steps up its London spending spree.

The Qatar Investment Authority, which already owns Harrods and stakes in Barclays and the London Stock Exchange, plans to spend more than £700m to mop up the 76 percent of Songbird that it does not already own, it is learnt.

The disclosure comes after Qatar added another landmark to its string of London trophies yesterday with the £250m acquisition of Park House, a 310,000 square feet property opposite Marks & Spencer’s Oxford Street flagship.

Qatar has invested heavily in Britain since 2007 and is now estimated to hold UK assets worth as much as £10bn. A deal with Songbird, which owns 69 percent of Canary Wharf, would allow the country to capitalise on the weak pound and an improving property market. Commercial property prices fell by almost 45 percent in the downturn, but have recovered by 13.5 percent, with the highest growth in central London offices.

Barwa Real Estate’s purchase on Thursday of the Park House shops, offices and residential development marks Qatar’s first wholly owned development venture in the UK. The scheme could be worth as much as £500m when it is finished in 2012, agents said. Barwa, which bought the development from Land Securities, is 50 percent owned by the state of Qatar.

The deal, which took six months to negotiate, was brokered by Amanda Staveley, the founder of PCP Capital Partners who engineered Abu Dhabi’s £3.5bn emergency funding for Barclays Bank two years ago. She is believed to have received a fee of £7.5m. Land Securities, Britain’s biggest developer, is set to make a total profit of about £50m from the sale, once the building is complete, as well as a profit share worth £33m and development management fees.

The deal marks another tick on the shopping list of London assets targeted by Qatar’s investment vehicles in recent months. Qatar, which last month bought Harrods for £1.5bn, has been mopping up assets in London, including the US Embassy in Grosvenor Square, this year. Sources close to the Qatar ruling family said on Thursday that the buying spree was far from over and hinted that more acquisitions of development opportunities would follow.

Separately, the Qatar Investment Authority is in talks to acquire a third-share of the Savoy Hotel and is among the final bidders in the £500m auction of the Grosvenor House.

Qatar is rumoured to be looking at a landmark hotel development next to the Tower of London. Ten Trinity Square, a former headquarters of the Port of London Authority, was sold to an American developer for £209m in 2006 and planning consent was granted last year for conversion to a six-star hotel and luxury apartments.

Qatari officials were not available for comment on the Songbird deal, but Ghanim bin Saad Al Saad, chairman and managing director of Barwa, said of Park House: “We are delighted to have acquired a major site in Central London which is set to become an important feature in one of the busiest and most successful locations in the UK capital. The investment demonstrates our commitment to Europe as part of our growth strategy and signals our interest in strengthening our portfolio interests in London.”

THE TIMES

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