In one of the biggest property deals ever seen in the UK, Canary Wharf has agreed to sell two buildings to Royal Bank of Scotland for ã1.1bn. Wholly owned subsidiaries of RBS paid a total of ã1.112bn for the two properties ââ¬" 25 Canada Square, occupied by Citigroup, and 5 Canada Square, occupied by Credit Suisse First Boston.
The 1.2m sq ft 25 Canada Square was valued at ã690m on 30 June 2003, and generates ã44.9m a year in rent. 5 Canada Square totals 515,000 sq ft, was valued at ã327m in June and provides an annual rent of ã19.7m.
The disposals will increase Canary Wharfââ¬â¢s net asset value by around ã8m, its adjusted NAV by ã32.1m and its triple NAV by around ã71.1m. Canary Wharfââ¬â¢s adjusted triple NAV is likely to fall by about ã96.5m.
The deals still need to be approved by Canary Wharf shareholders, and an extraordinary general meeting will be held on 22 December in order for voting to take place on the issue.
The sale of Canary Wharf to Morgan Stanley and Simon Glick will be conditional on the completion of the disposals. However, the deal to sell the buildings will still be completed if Morgan Stanleyââ¬â¢s offer is ultimately unsuccessful.
