Irish property group Ballymore has sold a 25% stake in a development in London's Docklands for €45m. The company sold its shareholding in Wood Wharf to the Canary Wharf Group.
The site has planning for 3.3 million square feet of offices and shops, 1,600 homes and a hotel. At present the site is semi-derelict.
The docklands site has over the past 24 years come to rival London's City financial district, attracting tenants including HSBC and Citigroup, and the purchase shows Canary Wharf's belief in strong future demand despite the financial sector's current woes.
It also allows Canary Wharf Group, majority owned by Songbird Estates and which owned 25% of Wood Wharf, to diversify its office-led property portfolio.
"We are becoming more involved with residential development and we see that continuing with the Wood Wharf development," a Canary Wharf Group (CWG) spokesman said.
The acquisition comes as investment banks severely prune back staff numbers and as companies shelve planned moves amid global financial turmoil, leaving some London developers struggling to attract tenants.
Law firm CMS Cameron McKenna and wealth manager Schroders are among companies that have recently pulled out of pre-let deals in major London schemes.
CWG paid £52.4m for a 50% interest in Wood Wharf owned by British Waterways and £38m for Ballymore's 25%. The deal with British Waterways included an annual ground rental payment to the government body, which will increase to £6m by 2016.
CWG may start construction of Wood Wharf's residential portion before the commercial aspect and would seek pre-lets for at least a third of the office space before commencing development, the spokesman said.
In September, CWG Chairman George Lacobescu said the group aimed to double the size of Canary Wharf by 2021, soaking up capacity for an extra 100,000 passengers a day from the Crossrail transport project and undertaking demand-led developments.
