Martial Arts Mania

Canary Wharf is likely to be the beneficiary of a £224m payout in order to cover its losses after Nomura moves out of the East London property.

The office is a 350,000 sq. ft. area, previously rented by Lehman Brothers before its bankruptcy, and later claimed by Nomura as it bought the European assets of the failed bank.

Nomura has however closed a deal finalizing its office relocation from East London to the central City property of Watermark Place development. The Japanese company will have access to 525,000 sq. ft. of area at its disposal there which will require well considered office planning. The group wants to move to the City in order to market itself as a leading financial institution and also to be close to its clients.

The decision by Nomura has spread fears about the future of Canary Wharf, as it would lose heavily without any renter at its property. IAD, which insured the contracted rent based on the premise of Lehman Brothers failing to honour the contract, is liable for an insurance payout to Canary Wharf.

Canary Wharf was promised the insurance payout in December, which provides it with some security. With the payout, it will be five years without any renters on the property before Canary Wharf starts making losses. However, if they do not find a renter quickly it will devalue the rent of the property significantly and they will find themselves in the same position again.