* NAV up nearly 50 pct to 2.66 bln stg in year through Dec
* Adjusted NAV per share up 38 percent to 290 pence
* Market value of portfolio up 14.9 pct to 6.57 bln stg
* Shares up 16 percent, hit more than four-year high
(Adds CEO comments, updates shares)
By Paul Sandle
LONDON, March 28 The strength of London's
property market was thrown into sharp relief on Friday as
Songbird Estates Plc, main owner of the Canary Wharf
estate in east London, said the estimated value of its buildings
and planned developments had jumped by nearly half in the past
Songbird shares leaped more than 14 percent to their highest
level in more than four years after its full-year results and
portfolio valuation beat analyst forecasts.
Parts of central London have experienced sharp rises in
property prices in recent months on the back of resurgent
economic growth and demand from overseas buyers.
Songbird Chief Executive David Pritchard dismissed prospects
of an unsustainable "bubble" in London residential property
prices, pointing to population projections for the city
indicating it would grow by 1 million people by 2020.
While prices could fluctuate, "that long-term demand
suggests that there will be a long-run underpinning of values,"
Yet the risk of overheating in property prices remains a
concern to the Bank of England, which on Thursday urged banks to
consider the risk of interest rate hikes when they approve
mortgages and said it was preparing tools to rein in potentially
House prices in England and Wales have risen by around 5
percent over the past year and in London they are up around 14
percent, according to Land Registry data, and some commentators
argue that parts of London's housing market are already in a
Songbird, also a part owner of the landmark "Walkie Talkie"
skyscraper in the City, London's traditional main financial
district, said on Friday its net asset value (NAV) - a key
measure for property companies reflecting the value of their
buildings and projects - had grown by nearly 50 percent to 2.66
billion pounds ($4.4 billion) in the year through December.
The company said in a statement it was confident about the
immediate prospects for the London real estate market.
"The development pipeline (of new buildings) is well
positioned to take advantage of increasing demand and the
prospect of a shortfall in supply of both prime commercial and
residential space," it said on Friday.
The developer and property owner is best known for its
commercial properties, but has been broadening the appeal of its
Canary Wharf site beyond major banks and financial firms, with
space dedicated to tech start-ups and plans for residential
Songbird is also developing a 20-acre site called Wood Wharf
adjacent to Canary Wharf, whose cluster of skyscrapers built
around London's former docks started springing up in the 1980s.
The new development consist of smaller office blocks,
apartments and shops and the group said was planning to devote
more of the site to residential than it initially planned.
A new planning application, which is under consideration,
included 2.5 million square feet of residential space out of a
total 4.9 million, Pritchard said.
The CEO said a number of factors had come together to
produce the increase in net asset value, including more office
space let, with occupancy rates rising to 97 percent, the
highest since the financial crisis, and more demand for retail
space, where yields had compressed as property values rose and
footfall - or the number of store visitors - had grown.
"But what's also in these results is the future," Pritchard
said. "We put in planning applications last year for 9 million
square feet. The market is recognising that long-term strategic
move, both in terms of the space and the broadening out of the
nature of the business - it's not just banks any more, it's
moving towards residential."
Shares in Songbird, which counts Qatar Investment Authority
and China Investment Corp as major shareholders, rose to a more
than four-year high of 235 pence and were trading up 16 percent
at 224.5 pence by 1429 GMT.
Analysts at JPMorgan Cazenove said the group had delivered
"outstanding full-year results", with NAV per share coming in 26
percent ahead of their expectation of 230p. Underlying pretax
profit of 22.4 million pounds was also ahead of expectations,
Songbird said its adjusted NAV per share increased 38
percent to 290p. The market value of its total portfolio rose
14.9 percent to 6.57 billion pounds, it said.
($1 = 0.6019 British Pounds)
(Editing by David Holmes)