Property values in London’s Canary Wharf financial district fell by £1.2 billion (S$2.1 billion) over the past year, led by a decline in the value of its office buildings, the landlord said in annual results published on Thursday (Apr 25).

Canary Wharf Group, which is joint owned by investors Brookfield and the Qatar Investment Authority, said in its 2023 earnings that its overall property portfolio declined in value to £6.8 billion from £8 billion.

Office buildings accounted for most of the decline, tumbling in value by more than £900 million, the company said, adding that the “fair values” were determined by independent external valuers.

Commercial real estate owners and developers have had a punishing few years, as soaring debt costs and emptying post-pandemic offices have combined to sour many property investments.

Canary Wharf, which sprung up in the east of London in the 1980s to offer an alternative to the City of London, is home to the likes of JP Morgan and Citi, but has been hit by high-profile planned exits of key tenants including HSBC and law firm Clifford Chance.

Other major financial institutions have opted to stay, however, including Morgan Stanley and Barclays.

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Canary Wharf has been developing thousands of homes and building labs in an effort to revitalise the area and reduce its reliance on offices.

The landlord also announced on Thursday that it had secured £553 million of new loans and refinancings, as it looks to tackle a £3.7 billion net debt pile.

Commercial property deals in Europe fell through in their highest numbers since the global financial crisis in the first quarter this year, MSCI said on Thursday, with sticky inflation and interest rates cooling hopes for a quick recovery.

Canary Wharf said on Thursday that occupancy rates for its offices stood at 91.1 per cent in 2023, down from 92.5 per cent in 2022. REUTERS