US Pension Fund Snaps Up Canary Wharf Assets for $359M

LONDON- Canary Wharf, now owned by Songbird, has sold the long leasehold interests in two buildings in London’s Canary Wharf financial district to US pension fund TIAA-CREF for euro 305 million ($358.6 million).

Songbird says 1 and 7 Westferry Circus were valued at euro 267 million ($312 million) for accounting purposes on June 30, 2005. 1 Westferry is principally let to oil company Texaco (now part of Chevron) until 2018 and the building’s annual rent is around euro 5.6 million ($6.5 million). The other building, 7 Westferry Circus, is let mainly to the European Medicines Evaluation Agency until 2013 and its annual rent is around euro 9.7 million ($11.3 million).

There is also unconfirmed speculation that Song Bird is in talks to sell Little Britain, the former headquarters of Clifford Chance, the law firm, to a consortium that includes Jack Dellal, the private property investor, and a Deutsche Bank fund in a deal worth more than euro 147 million (172 million).

The Docklands developer is thought to have given the group six weeks to conduct exclusive negotiations to buy the building after it beat competition from rival bidders, thought to include London & Regional, the private property group that is trying to buy Somerfield, the supermarket chain; and Hines, the US developer. The empty site would require extensive refurbishment, but it could be completed just as demand for offices in the City of London is projected to pick up.

Earlier this year Songbird sold 20 Canada Square to Brascan for euro 466 million ($624 million) and 15 Westferry Circus.