Canary Wharf Group

Most of this work is put out to competitive tender, and the company does have loose partnerships with some companies. It also has a preferred list of suppliers but will test the market for new suppliers and introduce new players where necessary.

Current and future projects
At the start of 2002 Canary Wharf had the largest building programme in London, with 820,000 m² of space under construction. Close to 92% of the 820,000 m² was committed. By the middle of 2002, the group had completed 270,000 m² of the total, leaving 550,000 m² comprising 10 buildings under development. In line with Canary Wharf's policy of having only one speculative development under way at any one time, just 60,000 m² of current development is speculative.

The scale of the programme is evident in investment for 2001/02, which increased markedly to almost £700m. However, there is little doubt investment will decline, as demand for office space in central London has reduced by about a third over the past year, whereas speculative development has increased sharply, with much due to come on stream in 2003. Canary Wharf is cautiously optimistic regarding the short term, with the combination of relatively low rents and highly specified buildings seen as an advantage at its Docklands developments.

Last year the group reached agreement with British Waterways to remove a restrictive covenant on 170,000 m² of space on the Canary Wharf estate. With this agreement, potential development space totals 1.6 million m².

Essential information
In late 2002, Canary Wharf announced it was to accelerate the return of £2bn in cash to shareholders in the form of a special dividend. Overall, the group aims to return all of the £2bn to shareholders by 2007.

Canary Wharf noted that it was able to bring forward the distribution, due to a good start to 2002. The group has held on to its optimism throughout 2002, despite turbulence and employment cut-backs in the financial sector. Vacancy rates in Canary Wharf's completed buildings were reported at just 2%, and HQ3, Canary Wharf's only speculative development at present, is 40% let. At the same time as announcing the accelerated cash distribution, Canary Wharf said it would probably apply for planning permission on buildings, which would add 500,000 m² of rental space by 2006.