CWG finance boss on bank talks, regeneration and ‘that’ levelling-up loan

There was no small degree of surprise in real estate markets when chancellor Jeremy Hunt said in his budget last week that Canary Wharf would receive £118m in levelling-up funding. The Docklands estate hardly seems like the kind of place requiring that kind of love from the public sector purse. In an interview with EG at MIPIM, Canary Wharf Group chief financial officer Becky Worthington is adamant people got the wrong end of the stick – the announcement came in a section of the budget talking about levelling up, she says, but isn’t actually “levelling-up money”. But even if it is a matter of semantics, the group is sure that funding will be put to good use. The plan is to put the pounds to work building the life sciences hub at CWG’s North Quay scheme, along with commercial and retail floor space, a healthcare diagnostic facility and up to 750 homes. “Homes England has been instrumental within Canary Wharf – and, of course, lots of places in the UK, London and elsewhere – at providing almost kick-start financing to get projects that are otherwise very difficult, but that will fundamentally have a material impact, on the ground,” Worthington says. “What they like to do is put money in where they can make the biggest difference.” “This is essentially going to be infrastructure [finance] for North Quay. Infrastructure is always the hardest bit of funding to get because it has a huge value but it doesn’t immediately generate [results]. It unlocks sites which otherwise might not be unlocked, and allows that commercial, residential beneficial use that you can actually create significant value out of.” Worthington knows the pressure of making such a scheme work, having spent 15 years with Quintain. “Regeneration is a challenging place to be,” she says. “It’s not for the faint-hearted, that’s for sure.” “Regeneration has to move with the times and what people want,” she adds. “But there are some things that people have always wanted and really good placemaking has been critical. But you can see now from how people choose to spend their money – people much prefer eating out, they prefer leisure activities – people actually want these experiences more than ever. Fulfilling those requirements is something that’s really important.” Worthington is at MIPIM with a mission – working on the group’s banking relationships. “We’ve got quite a large balance sheet to fund and financings to extend and renegotiate,” she says, adding that the focus is on reaffirming existing relationships with lenders such as Barclays, Societe Generale, QNB, Standard Chartered and LBBW as the company nears refinancing deals on existing assets, as well as striking up new relationships. “From a debt market point of view, a lot of loans that have been written over the past five years would be quite difficult to refinance at the moment,” she says. “What we’re seeing is that banks are really working out how they want to deal with these situations. Having good sponsors with relationships you can trust is absolutely critical for that. Having the ability to see a plan of a way through is really important. That becomes about two things. One is the quality of leases in the buildings, and the other one is about the ability potentially of sponsors to put equity in to support the deals.” Image from Canary Wharf Group