English Corpus

Canary Wharf has seen the sale of office space of 5 Churchill Place that was originally earmarked for a failed investment bank from America for £208m to an investor from Bermuda.

The building contains 12 floors although ten of the shared office floors are currently let out to JP Morgan Markets.

The sale yielded a six percent profit and includes a clause that states the Canary Wharf Group is responsible for paying about £2m per year over the next five years, to cover the two top floors that are not let.

Analysts predict that the clause may be risky for Canary Wharf, since occupier demand is still not recovering, which presents the threat that the company may be forced into paying all five years.

The JP Morgan let is signed in at 20 years with a rent of about £41 per sq ft.

Property analyst from Nomura, Mike Prew, stated that the yield from the sale is about right for Central London property and that the sale helped confirm that prime property is a valuable asset even at the present time. Prew added that while the occupier market is still slow, which could be a problem, since the property is a prime office space property it should not present too much of an issue.

The deal to a foreign investor comes one month previous to the purchase of the HSBC London headquarters by South Korea