Songbird Estates Plc, owner of the Canary Wharf Estate, today reported a move to full year pretax profit and said its adjusted net asset value per share was up on the previous year.
Songbird reported a 2009 pre-tax profit of £334.6 million having swung from a loss of £1.9 billion in 2008, which was due to the valuation shift that year. NAV improved to £1.19 billion from £421.8 million last year.
Rental income was up from £287.5 million last year to £318.4 million, and Canary Wharf Group's investment portfolio to be retained totaling 8.0 million sq ft was 96.2% let at Dec. 31 (2008: 7.9 million sq ft, of which 99.7% was let) including the building occupied by Lehman. There are rumours that Shell will be moving into the Lehman space.
The market value of property portfolio is £5.00 billion, an increase of 7.6% since June 30 excluding additions and a reduction of 0.4% over the year.
The company ended the year in a much stronger financial position despite the continued turbulence in the property and financial markets throughout 2009, particularly in the first half of the year.
A capital raising exercise was successfully completed in 2009 which involved a £430.3million share placing, a £189.7million compensatory open offer and an issue of £275.0million of Preference Shares. In addition, the Company entered into a new shareholder loan facility of £135.0million. Utilising this new capital the Company acquired the £880.0million Citi Loans at a discount of 5.0% to the outstanding principal and accrued interest at the date of purchase.
The new capital was provided by the sovereign wealth funds on the share register, Qatar Holding, GF Investments and MSREF, together with a new shareholder, Land Breeze, which is a wholly owned subsidiary of CIC. Their investment represents a considerable vote of confidence in the future of London as the global financial centre.
Practical completion was achieved during the year on the properties at 15 Canada Square which was pre-sold to KPMG, 5 Churchill Place of which 262,000 sq ft had been pre-let to JP Morgan and 30 North Colonnade a 330,000 sq ft building which was pre-sold to Fimalac for occupation by Fitch. Outside Canary Wharf practical completion was achieved in November 2009 on the Drapers Gardens joint venture development, following which, and subsequent to the year end, the building was let to BlackRock for a term of 25 years.
Adjusted NAV per share 168 pence (June 30: 132 pence) and the shares closed last night at 174.5 pence.
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