Home Business News Songbird Estates upbeat despite falling profits

Songbird Estates upbeat despite falling profits

by LLB Editor
23rd Sep 11 9:58 am

Canary Wharf controller Songbird Estates has reported a decline in earnings for the first half of the year after the sale of two buildings.

Songbird Estates, which develops and leases most of east London’s Canary Wharf business district, posted pre-tax profits of £6.6m in the six months to the end of June, down from the £13.1m for the same period last year.

Net rental income fell from £153.5m last year to £124.6m for the same period this year after the group sold the the former head offices of Lehman Brothers International at 5 Churchill Place and 25 Bank Street.

Songbird Estates said: “In the face of turbulent macro economic conditions and concerns on the levels of sovereign debt in Europe and the US the outlook for the second half of the year is less certain.

“However, in the London market, where supply of high quality Grade A space is still limited and the number of development completions is still relatively low there remain opportunities for the group to add value and to maximise returns on projects.”

Songbird Estates is building a 37-storey tower in the City of London known as the Walkie-Talkie building, in partnership with London-headquartered Land Securities Group, as it looks to branch out from its familiar territory at Canary Wharf.

It also purchased the majority of Shell’s London headquarters for £300m in a joint venture with Qatari Diar Real Estate Investment in July.

The company’s current market value is estimated at £910m.

It has a 69 per cent stake in Canary Wharf Group, the company which owns almost half of the 35 buildings in the business district and manages the others. Songbird Estates is in line to receive £31.2m from the Canary Wharf dividend announced on Wednesday.

The value of the company’s assets went up by £88m during the first half of its financial year, compared to the £177.6m increase seen at the same point last year.

Songbird Estates’ plans to add another 43,000 sq ft of shopping space to Canary Wharf have been approved, while footfall at the company’s existing retail properties went up by 3.3 per cent over the six-month period.

It said: “A productive start to 2011 with a further extension of activity in central London and successful lettings/pre-lets at Canary Wharf has helped place the group in a strong position to cope with macroeconomic uncertainty.”

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