Canary Wharf receives no proposal from Reichmann

Canary Wharf, the Docklands property group, on Tuesday said that the board of directors had not received any proposal from Paul Reichmann, executive chairman, or any consortium formed by him.

The company said in a statement following press speculation over the weekend: 'Mr Reichmann confirmed to the board that he has not formed any definitive intention to form a consortium or make an offer for the company, although he continues to review his options.'

Bidders for the Canary Wharf are expected to submit final offers this week for a takeover that could be worth £1.4bn ($2.2bn). Potential bidders include Brascan, the Canadian property company that owns 9 per cent of Canary Wharf, Goldman Sachs´s Whitehall Funds and Morgan Stanley Real Estate Funds.

The bids come as a new source of potential demand from government departments for space at Canary Wharf has emerged. A review just completed for the Home Office, traditionally an occupier of space in London´s West End, has suggested expanding into areas such as Southwark and Canary Wharf to cut occupancy costs in half.

The report, prepared by Home Office consultants, Donaldsons, is a blow to the West End office market where government departments are one of the few occupiers seeking large office blocks.

Canary Wharf has had limited success in luring government departments, although the Financial Services Authority is a key tenant. Government leases on the estate have been used to back Canary Wharf securitisations of its property assets, which have helped it cut borrowing costs.

CWG is building a speculative tower that has 400,000 sq ft available to let, sufficient for Home Office requirements.

Shares in Canary Wharf were up more than 4 per cent to 265p in early morning trading on Tuesday.

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