Business Week - Canary Wharf stands tall.
After a remarkable recovery ending in its first year of profitability, Canary Wharf is looking forward positively as it approaches the announcement of its interim results.
Saved from the clutches of administration in 1991 – when it was known as Olympia & York – Canary Wharf announced a profit of £54.1m in last year’s results compared to a loss of £42.8m in 1999. According to chief executive George Iacobescu, 2000 was ‘the most successful year in Canary Wharf’s history. The level of leasing activity has been the highest achieved in any single year, rents have reached new highs and the construction now underway, most of which is pre-let, will eventually provide more space than all the existing completed buildings.’
Its latest deals indicate the level of interest in this new area has not diminished, and the company has already pre-let most of its 13.5 million square feet of capacity.
A most recent example of this can be seen in an agreement to let one million square feet of office space to Lehman Brothers. Following last year’s successful results, the company boasted it was ahead of the leasing and development plans set out at its flotation in April 1999.
Aside from the office buildings, other businesses are booming, with more than 140 restaurants, bars and shops now operating at Canary Wharf.
A new mall, which will house approximately 2,000 retail outlets is also under construction and is expected to open in 2003.
The company’s stock is among analysts’ favourites. They tipped Canary Wharf’s shares in February, as rental growth and development prospects improved.
As news of leasing agreements was released, analysts at Merrill Lynch have upgraded the stock, and Schroder Salomon Smith Barney’s analysts have reiterated their ‘buy’ recommendations. The company’s shares have risen 11.9% in the last month and 59.6% since last year.
Peter Anderson, who directs the finance functions under the title ‘managing director, finance’, has seen Canary Wharf rise from the ashes of its predecessor. Prior to joining Olympia & York as executive vice president, Anderson worked as managing director of the Swiss Bank Corporation’s UK operations. He is known to his colleagues as an outstanding and innovative manager, having helped Paul Reichmann to rescue the real-estate company.
According to Anderson, his work centres on raising money for the development of Canary Wharf, rather than the pure accounting side of the venture.
To read more about the development go to www.canarywharf.com.
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Annual results to June 30, 2000
Turnover:£114.4m
Net assets: £1.52bn
Profit: £54.1m
Market Capitalisation: £3.46bn
Executive Directors:
George Iacobescu, chief executive officer, appointed June 1998. Peter Anderson, finance director, appointed December 1995
Auditor: Arthur Andersen
Company Profile: Real estate company Canary Wharf owns and manages the multi-occupancy buildings in south-east London. Canary Wharf Group listed on the London Stock Exchange in April 1999.