Parts of Canary Wharf to be sold off as enterprize zones
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Your support makes all the difference.LLOYDS Bank is planning to sell up to pounds 200m of the Canary Wharf development to private investors within the next few months.
The sale will take the form of an enterprise zone scheme aimed at attracting investment from higher- rate taxpayers. The Government in effect will be funding pounds 80m of the scheme in the form of 40 per cent tax rebates to investors.
Canary Wharf has attracted criticism for the huge tax breaks it has received. Lloyds, as leader of the 10-bank syndicate that owns the development, is determined, however, to seek new ways of bringing money into the development when it emerges from its pounds 1.1bn restructuring at the start of next month.
If the tax-break scheme is successful it is likely to be followed by several other sell-offs - of a similar size or larger - of other parts of Canary Wharf.
The first enterprise zone scheme is expected to be launched between the start of next month and February. To qualify for the tax-favourable enterprise zone status all the occupied parts of the development must be sold within 24 months of when they were first occupied - that deadline falls in February.
The scheme is expected to cause some controversy. Enterprise zone specialists are predicting a growth of interest in the sector and Canary Wharf could find itself competing against deals that are extremely generous to investors.
Lloyds is thought to be considering a loan-back structure under which investors would recoup their investment within the first six months and also make a profit of perhaps 20 per cent.
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