Economic recovery has led to a doubling of viewings of vacant space at London’s Canary Wharf complex by prospective tenants in the first half of this year compared with the previous six months, according to its landlord Songbird Estates, the UK-listed property company.
A total of 100,000 sq ft has been leased at Canary Wharf since the start of this year. But the length of leases agreed are far shorter than the traditional 25 years. They also tend to offer tenants rent-free periods and the right to break their leases midway through the term.
Oil company Shell, for example, has agreed to occupy 38,200 sq ft at £36 per sq ft at Bank Street, for five years, subject to a nine-month rent-free period and a break clause in the third year. Around 6,200 sq ft has gone under offer to payment processing company Secure Trading at £40 per sq ft, on a 10-year lease with a break available after five.
Outside Canary Wharf, in central London, a 690,000 sq ft scheme being developed in partnership with Land Securities at Fenchurch Street, central London, is 57% let.
Revaluations boosted Songbird’s net assets by 13.3% to £2 billion, producing net assets per share of 210p. The weighted average of yields used to value Canary Wharf was unchanged since the start of the year at 5%. Pre-tax profits surged to £264 million in the first six months, against £102 million during the same period in 2012, after incorporating a revaluation gain of £145 million.
