Canary Wharf Group buys back Isle of Dogs building for £128m

 
Kasmira Jefford
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CANARY Wharf Group has bought 15 Westferry Circus on the Isle of Dogs out of administration for £128m, its listed parent company Songbird Estates revealed yesterday.

The developer has bought back the asset after selling it to Vico Capital, the property vehicle owned by Ireland’s O’Donnell family, in 2006 at the top of the market for around £134m.

Ernst & Young was appointed as administrator in May to the two special-purpose vehicles – Gort and Hibernia – that currently own the long leasehold.

Under the terms of the deal, Canary Wharf will take on an existing swap on the senior debt, which has an estimated value of £11.4m and which matures in April 2016.

The acquisition is being funded by way of a new loan provided by Metlife, Canary Wharf said.

US bank Morgan Stanley has a 35-year lease on the office building, which started on 31 August 2001 and expires in 2036, with a break clause in 2026. It is currently sub-let to Tubelines and generates around £8.22m of income per year.

The deal follows Canary Wharf’s acquisition of 7 Westferry Circus, from TIAA-CREF, the financial services group, in March.