Canary Wharf Group Plc and Qatar’s sovereign-wealth fund won local-government approval to construct offices and 877 homes in eight buildings at the site of Royal Dutch Shell Plc’s U.K. headquarters near the London Eye Ferris wheel on the River Thames.
Qatari Diar Real Estate Investment and the controller of the Canary Wharf financial district received permission late yesterday from Lambeth Borough Council for a project that includes more than 1.2 million square feet (111,000 square meters) of offices and apartments across eight buildings ranging from five to 37 stories. The tower occupied by Shell since the 1960s will remain part of the development.
“We’re very excited about the area, it’s almost the best-kept secret,” John Pagano, managing director of Canary Wharf Group, said in a telephone interview. “It’s going to compete with the West End fringe.”
About 20 percent of the new homes will be for low-income residents and the developers will pay as much as 24.5 million pounds ($37 million) to the borough, according to a filing on the council’s website. Not all of the affordable homes will be on the Shell Centre site.
Songbird Estates Plc, which owns 69 percent of Canary Wharf Group, was up 1.3 percent at 141.25 pence at the 4:30 p.m. close in London. The shares have gained 19 percent this year, raising Songbird’s market value to 1.05 billion pounds.
“The development would give rise to not only additional jobs in the borough, but would also contribute towards strategic objectives for London in its promotion as a world city,” council officials said in a document recommending planning approval.
The development is in London’s Southbank district, where investors have spent about 500 million pounds on real estate in the past six months, Investment Property Databank Ltd. and broker Farebrother said in a May 20 report. Offices in the area generated returns of 9.6 percent in 2012, the second-highest in London, according to the report. The West End was top with returns of 10.6 percent.
Qatar, the world’s biggest producer of liquefied natural gas, spent $60 billion a year abroad between 2008 and 2012, according to International Monetary Fund data. The nation’s sovereign-wealth fund has, through various units, amassed stakes in high-profile U.K. real estate during the spree, including the Shard skyscraper, the Chelsea Barracks luxury-housing development and Harrods department store.
Shell, Europe’s biggest oil company, is based in The Hague.