(Bloomberg) -- Canary Wharf Group is hoping to raise new debt backed by its retail assets in order to repay £350 million ($465 million) of bonds maturing in April, according to its Chief Executive Officer, Shobi Khan.
The company — co-owned by the Qatar Investment Authority and Brookfield Corp. — is looking to refinance a number of bonds, including a £350 million note due in April next year and €300 million ($332 million) in debt maturing in 2026. Bloomberg News reported last month that the company was considering offering its shopping mall assets as collateral for the debt.
“We are in the market right now with our retail portfolio, which I think we’ll use to raise financing to pay off the bonds,” Khan told Bloomberg Television in an interview on Wednesday, referring to the note due in April 2025.
The developer of London’s dockland financial district has come under pressure from falling property prices as tenants including HSBC Holdings PLC and Clifford Chance LLP are moving to new offices in the City. Job cuts in the financial industry and the shift to more flexible working have added to the uncertainty over long-term demand for office space in the east London outpost.
Canary Wharf’s retail centers saw 67 million visitors last year, and the number is set to exceed 70 million in 2024, Khan said, adding “the demand is there.” He refused to rule out selling assets to shore up finances, saying the company was “constantly in the market” to take advantage of sale opportunities.
On its Aug. 29 earnings call, the company said it was considering refinancing options including traditional, on-balance sheet secured loans, as well as off-balance structures — which would be more like joint ventures with third-party equity and debt.
Canary Wharf’s 2025 bonds are now trading at 97.7 pence on the pound, up from around 95 pence in August, according to data compiled by Bloomberg.
Planning Application
Khan also told Bloomberg TV that Canary Wharf is on target to submit a planning application to re-purpose HSBC’s current premises in September next year, with the goal of starting works in late 2027 once the bank has moved to a smaller headquarters in the City. The plans include transforming the monolithic office tower into a mix of uses including workspace, leisure, entertainment, education and cultural attractions.
The project is indicative of the yearslong efforts that Qatar and Brookfield have embarked on to pivot away from a reliance on offices rented to financial services companies, a sector that’s shrunk significantly in London since the financial crisis and that left it feeling deserted outside of office hours.
Canary Wharf has built the area’s first homes and focused more on cultural and entertainment activities, measures that have increased foot traffic to record highs, particularly in evenings and on weekends.
Still, Khan warned that issues in the UK planning system were slowing down the pace of development in Canary Wharf. Eden Dock — a waterfront project which opened on Wednesday — took “over three years to get done,” he said.
“It’s harder to do business in the UK than it is in the US,” Khan added. “The government’s working on planning reforms and all that stuff — it just takes a lot longer to get stuff done here.”
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