Chinese-owned Canary Wharf office tower calls in receivers

A second Canary Wharf office block in as many weeks has collapsed into a form of insolvency amid growing financial pressure on commercial property owners.

Sky News understands that Alvarez & Marsal, the restructuring firm, has been appointed as fixed charge receiver over the shares of Cheung Loong Holdings Limited, which indirectly owns the long leasehold of 20 Canada Square.

The building has for years been home to BP's oil trading division, while the credit ratings agency Standard & Poor's has been among its other tenants.

Encompassing about 70,000 square metres, 20 Canada Square shares a beneficial owner with 5 Churchill Place - former home to the collapsed investment bank Bear Stearns - which crashed into insolvency last month.

FTI Consulting is handling the 5 Churchill Place process.

The latest development will not affect the day-to-day operation of the building, with Jones Lang LaSalle (JLL) and BNP Paribas Real Estate continuing to act as asset and property manager respectively.

Rob Croxen, a managing director at A&M, said in a statement issued to Sky News: "The appointment of fixed charge receivers over the shares of Cheung Loong is not expected to cause any operational impact at 20 Canada Square, which will continue to operate as normal.

"JLL and BNP will be reaching out to tenants and suppliers to provide reassurance over the continued operation of the building in the next few days."

Both Canary Wharf buildings were acquired by Cheung Kei Group, a Chinese property developer, in 2017, for a combined £680m.

The twin insolvencies largely relate to Cheung Kei's financial position, but will nevertheless trigger questions about commercial real estate values in the aftermath of the COVID-19 pandemic.