Qatar sovereign fund acquires majority stake in Canary Wharf

12 Oct 2009

Qatar Holding, the investment arm of the $59-billion sovereign wealth fund, Qatar Investment Authority (QIA), has taken up its rights to 24 per cent of the 7.66 million new shares issued by UK's Songbird Estates, majority owner of the Canary Wharf business district, thus becoming the largest investor in the company.

Songbird, which will own 69.3-per cent of Canary Wharf Group, following the share offer and debt financing, raised a record $1.47 billion through the share sale, which was underwritten by four shareholders, including the sovereign wealth funds of Qatar and China, JP Morgan Cazenove and Morgan Stanley.

Songbird Estates, the UK's biggest real-estate company was forced to tap investors for funds to repay all its third-party debts, including a loan of £880 million of Citigroup.

On Friday, the company said that 59.6-per cent of the 11.3 million new shares were taken up, leaving its bankers JPMorgan Cazenove and Morgan Stanley to sell the remainder in the market, which was eventually sold below Songbird's closing share price on Thursday.

Subsequent to the fundraising, Qatar Holding will be holding a majority 24 per cent stake with total investment exceeding £350 million. It will get three board seats on Songbird Estates and one on Canary Wharf Group, where Songbird will have a 69.3 per cent stake.

Ahmad Al-Sayed, managing director and CEO of Qatar Holding said, "We believe the very positive response to the offering shows the improving sentiment towards UK commercial property in recent weeks as well as the attractiveness of this transaction. We are pleased to have taken this opportunity to increase our stake in an outstanding prime real estate portfolio with stable long-term income and high calibre management".