British Waterways plans £2bn development to dwarf Wharf

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The Independent Online

British Waterways will outline plans today for a £2bn commercial property development in London Docklands to rival Canary Wharf.

The Government agency will launch a nine-month search for a partner to develop a 20-acre site east of Canary Wharf.

British Waterways hopes to build a mixture of offices, shops, houses and a hotel, which it estimates will be worth £2bn when complete. This is £400m more than the current value of Canary Wharf Group, the quoted company which is subject to a bid battle.

British Waterways' proposed development is part of a strategy to unlock the value tied up in its huge land portfolio. However, the Docklands initiative will be bigger than anything the agency has attempted before and, when complete, would double the value of its property portfolio.

Stuart Mills, the commercial property manager at British Waterways, said: "We are likely to form a consortium with a funder, a developer and a residential partner. We need someone to inject equity into the project and raise debt."

British Waterways is likely to retain a 50 per cent stake in the completed development. Companies expected to express an interest include Land Securities, British Land and Prudential. There is a question mark over Canary Wharf Group, given that it is subject to a takeover battle between US investment bank Morgan Stanley and Canadian property group Brascan. But Mr Mills said: "I'd be surprised if they didn't express an interest."

British Waterways is expected to submit a planning application for the site, named Wood Wharf, early next year. Mr Mills said that British Waterways would not develop the site without a pre-lease from a tenant.

Meanwhile, Morgan Stanley is expected to increase its offer for Canary Wharf this week, trumping Brascan's bid of 275p-a-share.

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