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Canary Wharf has secured bondholder approval for a £610m refinancing plan as the east London landlord moves closer to completing a series of high-stakes finance deals.
Canary Wharf Group Companywhich owns and operates a large part of London’s Docklands financial centre, wants to take £610m in new bank loans against its sprawling underground shopping centers to refinance two bonds due in 2025 and 2026.
The lessor, owned by Brookfield and the Qatar Investment Authority, needs approval from those bondholders to raise the new debt. Bondholders have given their consent, according to a statement on Wednesday.
The bonds are the latest in a tangled series of deals to tidy up the landlord’s balance sheet amid much higher borrowing costs, falling property values and concerns about the ability of the estate attract and retain anchor tenants.
Completion of the deal will leave CWG without a major debt repayment deadline until 2028, giving the company breathing room to adapt to the post-pandemic office space market.
Flagship tenants HSBC, Clifford Chance and Moody’s have announced plans to leave the estate, while Morgan Stanley and Barclays have extended their stays in smaller premises. Fintech Revolut is expanding its headquarters to the estate.
To support CWG’s pitch to bondholders, Brookfield did pledged up to £900m of equity to repay two bonds — the third is due in 2028 — if necessary, effectively guaranteeing refinancing.
The QIA decided not to sign the £900m defense mechanism, saying it could do so later.
QIA and Brookfield jointly injected £300m into the company last year and provided a £100m loan, helping CWG navigate a complex set of asset-backed refinancing deals this year.
Given the sharp drop in commercial real estate prices, especially office buildings, CWG, like other landlords, had to pay off these loans to secure the extension. The group’s debt-to-value ratio is still at 53 percent, exceeding the company’s own target of 50 percent. the value of his portfolio fell.
Canary Wharf’s 1.2 million sq ft shopping and entertainment portfolio, valued at £1.2 billion, has benefited from record footfall at the estate, which has positioned itself as a shopping destination for people in the surrounding east London areas, rather than just an amenity for office workers.
