China invests in Canary Wharf with £880m bail-out of Songbird

In a sign of the increasing influence of the East, Qatar has joined the Chinese sovereign wealth fund, China Investment Corporation, in supporting a substantial equity raising that will help Songbird pay off an £880m loan from Citigroup that is due next May and threatens the company's future.

The value of Canary Wharf, home to some of the world's largest financial services groups, has tumbled since 2007 as a result of the turmoil in the global economy. Songbird, which owns 60.8pc of Canary Wharf Group (CWG), risked breaching loan-to-value covenants in a November test on the Citi loan, its only debt.

The value of the Songbird portfolio fell almost 30pc to £4.9bn in 2008 and David Pritchard, the chairman, said the company "could have gone down the path of a liquidation or administration" if the new deal had not been struck, echoing the problems the original developer of Canary Wharf faced in the early 1990s.