Canary Wharf Group is most famous for its sky-scraping offices, but it was again the fully-let retail portfolio that provided the bulk of returns in the first half of 2013. The group's subterranean shop parades were marked up 6.7 per cent over the six-month period, driven by development profits on an extension due to open in November as well as rental growth. With a steady performance from the office portfolio, Songbird Estates (SBD), the Aim-traded vehicle that owns about two-thirds of the group, saw its adjusted book value rise 6.2 per cent from 210p to 223p.
The success of retail at Canary Wharf - the Waitrose outlet is said to be the country's most profitable - has encouraged the group to diversify away from its historic niche as a banking landlord. It is trying to attract tech start-ups serving the financial services and retail sectors with 'Level39', which offers tailored office, meeting and conference space at One Canada Square (the pencil-shaped tower). Construction should also start on a new residential tower by Christmas - although the group has yet to receive planning consent. Elsewhere, planning consent for one of two joint ventures - the vast Shell Centre regeneration on South Bank - is being reviewed.
Brokerage Peel Hunt now expects year-end book value of 230p.
SONGBIRD ESTATES (SBD) | ||||
|---|---|---|---|---|
| ORD PRICE: | 155p | MARKET VALUE: | £1.15bn | |
| TOUCH: | 155-156p | 12-MONTH HIGH: | 158p | LOW: 105p |
| DIVIDEND YIELD: | nil | DEVELOPMENT PROPERTIES: | £706m | |
| DISCOUNT TO NAV: | 30% | NET DEBT: | 172% | |
| INVESTMENT PROPERTIES: | £4.84bn | |||
| Half-year to 30 Jun | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 199 | 102 | 7.0 | nil |
| 2013 | 223 | 264 | 22.2 | nil |
| % change | +12 | +158 | +217 | - |
Ex-div: na Payment: na | ||||
