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 ÃÂ£1.1bn. Wholly owned subsidiaries of RBS paid a total of ÃÂ£1.112bn for the two properties Ã¢â¬" 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 ÃÂ£690m on 30 June 2003, and generates ÃÂ£44.9m a year in rent. 5 Canada Square totals 515,000 sq ft, was valued at ÃÂ£327m in June and provides an annual rent of ÃÂ£19.7m.
The disposals will increase Canary WharfÃ¢â¬â¢s net asset value by around ÃÂ£8m, its adjusted NAV by ÃÂ£32.1m and its triple NAV by around ÃÂ£71.1m. Canary WharfÃ¢â¬â¢s adjusted triple NAV is likely to fall by about ÃÂ£96.5m.
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 StanleyÃ¢â¬â¢s offer is ultimately unsuccessful.