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WPP relents in rent action

Neil Thapar
Saturday 16 July 1994 23:02 BST
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WPP, the advertising group, has been forced to pay pounds 2.3m to Canary Wharf after the London Docklands property group launched a legal action to reclaim unpaid rent owed by one of WPP's agencies.

The row erupted after Canary Wharf, developed by the Reichmann brothers, went into receivership two years ago. Ever since then WPP has refused to complete a 25-year lease on behalf of its Ogilvy & Mather advertising agency, which is based at Cabot House next to the tower.

Last year WPP attempted to block a pounds 1.1bn rescue plan by administrators to Canary Wharf because it was concerned about the office development's future cash-flow projections and the landlord's ability to satisfy long-term obligations. But the attempt failed and Canary Wharf has since come out of administration and is owned by a consortium of banks.

However, the advertising group has continued to voice concern, prompting High Court proceedings by Canary Wharf earlier this year.

It agreed to pay the back rent in an out-of-court settlement last month, but is still holding out against signing the lease. 'We are in dispute over the lease because we believe that Canary Wharf's present owners are not of the same financial standing as its original developers. We want to ensure that they will adhere to the long-term lease obligations,' a WPP spokesman said.

Canary Wharf has rejected the allegations.

(Photograph omitted)

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