Songbird Estates profit boosted by Lehman sale

Lehman brothers worker
Image caption Songbird lost out on rent payments after the collapse of Lehman Brothers bank

The property company that owns much of Canary Wharf has reported a sharp rise in annual profits, thanks in part to the sale of the old Lehman Brothers building to JP Morgan.

Songbird Estates posted pre-tax profits for 2010 of £463.8m, a rise of 39% on the £334.6m the company made in 2009.

The firm also said new tenants helped to boost retail rents.

The market value of its portfolio at 31 December stood at £4.6bn, a rise of almost 10% on a year earlier.

"The group had a very positive 2010 and will be looking to continue development at Canary Wharf in 2011," said Songbird's chairman David Pritchard.

Songbird made a profit from the sale of 25 Bank Street to JP Morgan of £155m.

It made an additional £145m from a settlement to terminate a contract with US insurer AIG that covered Songbird against rental default by Lehman.

On the downside, the company had to write off more than £50m after Lehman Brothers' administrators stopped paying rent on its Bank Street offices.

Songbird controls more than half the buildings in Canary Wharf.

It is the majority stakeholder in Canary Wharf Group, which rents out 17 of the 35 retail and office buildings in the London financial district.

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