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Qatari fund bids for Canary Wharf owner Songbird Qatari fund bids for Canary Wharf owner Songbird
(about 1 hour later)
Qatar’s sovereign wealth fund is bidding to add yet another London landmark to its portfolio of trophy assets, by making an approach to buy all of Songbird Estates, the company that owns Canary Wharf in London’s Docklands.Qatar’s sovereign wealth fund is bidding to add yet another London landmark to its portfolio of trophy assets, by making an approach to buy all of Songbird Estates, the company that owns Canary Wharf in London’s Docklands.
The Doha-based Qatar Investment Authority (QIA), which made the approach on Wednesday afternoon with the commerical property firm Brookfield Property Partners, already owns 28.6% of Songbird, the London stock exchange was told in a statement. The oil and gas-rich state’s investment arm, the Qatar Investment Authority (QIA), made a preliminary approach on Wednesday afternoon together with the commercial property firm Brookfield Property Partners. The QIA already owns 28.6% of Songbird, which boasts a property portfolio worth £6.3bn. The two companies have until 4 December to make a firm offer or will have to walk away for six months under UK takeover rules.
Shares in Songbird leapt 16% on the news, a 43p rise to 305p. Other major shareholders in Songbird that the pair need to buy out are Simon Glick’s Glick Entities, which holds a 25.9% stake, the China Investment Corporation with 15.8%, Morgan Stanley with 8.5%, and Third Avenue Management, with its 3.2% holding.
The move comes less than a fortnight after QIA agreed to buy HSBC’s global headquarters – also in in Canary Wharf – for a reported £1.1bn, making the HSBC Tower London’s costliest office building. Shares in Songbird leapt 20% on the news, a 53p rise to 315p, giving the company a market value of £2.3bn.
The QIA or its property arm, Qatari Diar, already owns the Shard, Harrods, Chelsea Barracks and the Olympic Village in Stratord, east London. The former Qatari prime minister Sheikh Hamad bin Jassim bin Jaber al-Thani owns 1 Hyde Park, one of the most expensive addresses in the world, in a joint venture with the Candy brothers. Qatar’s move comes less than a fortnight after it agreed to buy HSBC’s global headquarters – also in in Canary Wharf – for a reported £1.1bn, making the HSBC Tower London’s costliest office building.
Songbird owns 69% of the Canary Wharf Group (CWG), which owns the site that plays host to some of the world’s biggest banks. Brookfield owns 22% of CWG. Through the QIA or its Qatari Diar property arm, the tiny emirate of Qatar already owns a number of London landmarks – including the Shard, Harrods, Chelsea Barracks and the Olympic Village in Stratford, east London. The Shard is 95% owned by Qatar which swooped on the tower at the height of the financial crisis when western investors took fright. The Qataris also own the US embassy building in Grosvenor Square.
The Qatari buying spree in London started in 2010 when the fund bought Harrods. They also hold 26% of Sainsbury’s and a stake in Barclays. However, they QIA failed in its attempt to buy House of Fraser last year, losing out to the Chinese conglomerate Sanpower, which acquired the department store chain in a £480m deal. The former Qatari prime minister Sheikh Hamad bin Jassim bin Jaber al-Thani owns One Hyde Park, home to the world’s most expensive flat which sold for £140m earlier this year, in a joint venture with the Candy brothers.
Songbird owns 69% of the Canary Wharf Group (CWG), which owns the Docklands site that plays host to some of the world’s biggest banks. Brookfield owns 22% of CWG. Songbird also holds joint stakes in the Walkie Talkie in the City with Land Securities, and the Shell Centre on the South Bank with Qatari Diar.
This summer Canary Wharf Group received the green light to construct 30 buildings, including more than 3,000 homes, at the eastern edge of the Docklands site, the first extension since the 2008 banking crisis. It is also revamping London’s South Bank around the Shell Centre tower.
The Qatari buying spree in London started in 2008 when they snapped up a 20% stake in Camden market through investing in property firm Chelsfield, followed by the 2010 purchase of Harrods for an estimated £1.5bn, ending Mohamed al-Fayed’s 25-year ownership of the famous Knightsbridge store. A week ago, the department store paid its Qatari owners a £118m dividend after another year of brisk trade. In 2011, the Olympic Village was sold to Qatari Diar and UK property developer Delancey Estates in a deal that left UK tapayers £275m out of pocket.
Through their investment companies, the Qatari royal family also holds 26% of Sainsbury’s and a stake in Barclays. However, they are not always victorious. Last year, the QIA failed in its attempt to buy House of Fraser losing out to the Chinese conglomerate Sanpower, which acquired the department store chain in a £480m deal.
Qatar’s sovereign wealth fund and its Qatari Diar arm were founded in 2005 to strengthen the gulf state’s economy by investing in new assets around the world.