REG - Canary Wharf Fin II - Annual Financial Report
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RNS Number : 4728C Canary Wharf Finance II PLC 29 April 2026
CANARY WHARF FINANCE II PLC
29 APRIL 2026
PUBLICATION OF THE ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED
31 DECEMBER 2025
Pursuant to sections 4.1 and 6.3.5 of the Disclosure and Transparency Rules,
the board of Canary Wharf Finance II plc (the "Company") is pleased to
announce the publication of its annual financial report for the year ended 31
December 2025, which has been approved by the board and signed on the date of
this announcement and will shortly be available from www.cwg.com/Investor
Relations.
The information contained within this announcement does not comprise statutory
accounts within the meaning of the Companies Act 2006 and is provided in
accordance with section 6.3.5 of the Disclosure and Transparency Rules.
In compliance with the Listing Rule, a copy of the 31 December 2025 annual
financial report will be submitted to the UK Listing Authority via the
National Storage Mechanism and will shortly be available to the public for
inspection at
https://www.fca.org.uk/markets/primary-markets/regulatory-disclosures/national-storage-mechanism.
Dated: 29 April 2026
Contact for queries:
J J Turner
Company Secretary
Canary Wharf Finance II plc
Telephone: 020 7418 2000
Registered office address:
One Canada Square
Canary Wharf
London
E14 5AB
United Kingdom
Principal place of business, domicile of entity and country of incorporation:
United Kingdom
STRATEGIC REPORT
for the year ended 31 December 2025
The directors, in preparing this Strategic Report, have complied with section
414C of the Companies Act 2006.
This Strategic Report has been prepared for the company and not for the group
of which it is a member and therefore focuses only on matters which are
significant to the company.
BUSINESS MODEL
The company is a wholly owned subsidiary of Canary Wharf Group plc and its
ultimate parent undertaking is Stork Holdco LP.
The company is a finance vehicle that issues securities which are backed by
commercial mortgages over properties within the Canary Wharf Estate. The
company is engaged in the provision of finance to the Canary Wharf Group,
comprising Canary Wharf Group plc and its subsidiaries ('the group'). All
activities take place within the United Kingdom.
BUSINESS REVIEW
At 31 December 2025, the company had notes with a nominal value of
£1,022,928,574 (2024 - £1,041,472,487) listed on the London Stock Exchange
and had lent the proceeds to a fellow subsidiary undertaking, CW Lending II
Limited ('the Borrower'), under a loan agreement ('the Intercompany Loan
Agreement'). The notes are secured on a pool of properties at Canary Wharf,
owned by fellow subsidiary undertakings, and the rental income therefrom.
The securitisation has the benefit of an agreement with AIG which covers the
rent in the event of a default by the tenant of 33 Canada Square over the
entire term of its lease. At 31 December 2025, AIG had posted £15,271,307
(2024 ‑ £34,034,750) as cash collateral in respect of this obligation.
The company also has the benefit of a £300.0m liquidity facility provided by
Lloyds Bank plc, under which drawings may be made in the event of a cash flow
shortage under the securitisation. The liquidity facility matures on
22 October 2037.
The ratings of the notes as of the date of issue of this report are as
follows:
Class Moody's Fitch S&P
A1 Aaa AA A+
A3 Aaa AA A+
A7 Aaa AA A+
B Aa3 A+ A+
B3 Aa3 A+ A+
C2 A3 BBB+ A
D2 Baa3 BBB A‑
KEY PERFORMANCE INDICATORS
2025 2024
£ £
1,041,472,487
Securitised debt - nominal value 1,022,928,574
Securitised debt - fair value 982,627,616 938,849,230
Securitised debt - carrying value 971,842,381 935,711,699
Financing cost (before adjustment for fair value) 61,914,791 61,633,798
Total comprehensive income 110,988 111,474
Weighted average maturity of debt 7.9 years 8.8 years
Weighted average interest rate 6.0% 6.1%
The above Key Performance Indicators are the most appropriate in assessing
business performance as they are all of high importance in analysing the
movements in and current outlook of the securitised debt, which underpins the
year on year movements throughout the financial statements.
STRATEGY & OBJECTIVES
Exposure Management
The mark to market positions of all the company's derivatives are reported to
the Group Treasurer on a monthly basis and to the directors on a quarterly
basis. The Group Treasurer monitors hedging activity on an ongoing basis, in
order to notify the directors of any over hedging that may potentially occur
and proposals to deal with such events.
Hedging Instruments and Transaction Authorisation
Instruments that may be used for hedging interest rate exposure include:
· Interest rate swaps
No hedging activity is undertaken without explicit authority of the board.
Transaction Accounting
All derivatives are required to be measured on balance sheet at fair value
(mark to market).
Credit Risk
The Company adopts the Group's policies which restrict counterparties with
which derivative transactions can be contracted and cash balances deposited.
This ensures that exposure is spread across a number of approved financial
institutions with high credit ratings.
All other debtors are receivable from other group undertakings.
PRINCIPAL RISKS AND UNCERTAINTIES
The Company has adopted Canary Wharf Group Investment Holdings plc ("the
Group") principal risks and uncertainties monitoring and management policies
as principal risks and uncertainties are not managed separately by the
company. The risks and uncertainties facing the business are monitored
through continuous assessment, regular formal reviews and discussion at the
Group audit committee and Board meetings. The group recognises that the
effective management of risk is key to the business success. As the Group
has grown and evolved in recent years, diversifying the profile of the Estate
and expanding operations, its risk profile has also evolved. At the same
time the Group has needed to navigate changes in how people work, as well as
an increasingly challenging global economic, political, and geopolitical
environment. The Group has responded by focusing on the creation and
protection of value through its Risk Management programme - for the Group's
shareholders and investors, its tenants, and for visitors to the Canary Wharf
Estate.
The Group's board has overall responsibility for the Risk Management for the
Group. In this role, it is underpinned by the Audit Committee and the
Executive Risk Committee and supported throughout by the Risk Management team.
The Group's Risk Management programme was the subject of extensive revision in
2022 and has been the focus of continued investment and development. The
programme is embedded across the Group, with department heads and specialist
functions acting as risk managers and risk owners.
The Group's Risk Management programme is aligned to ISO 31000 (Risk
Management) and informed by best practice across property development,
construction, facilities management and property and retail management. The
Group is also certified to ISO 45001 (Health & Safety Management), ISO
9001 (Quality Management) and ISO 22301 (Business Continuity), underscoring
its commitment to excellence.
The Risk Environment
All departments and specialist functions across the Group continually monitor
risks in their operating environments and are supported in this by external
expertise and the Risk Management team. The Executive Risk Committee
conducts structured horizon scanning, focusing on challenges to the UK economy
and the commercial real estate sector, as well as changes in government,
regulation, and developments across sociological, technological, legal, and
environmental sectors.
Principal Risks - External:
Macroeconomic:
Macroeconomic risks continue to be the most significant category of risks on
the Group's register, reflecting the challenges to the UK and global
economy. Whilst the Group has seen positive developments in the reduction of
the UK's inflation and interest rates, the relevant business units continue to
monitor a range of domestic and global, factors that could potentially reverse
these gains. Risks in this are graded medium to high likelihoods and impact.
Management and mitigation: Control measures adopted by the Group include
continued engagement and support of our shareholders, close monitoring of key
economic indicators in the context the Group's strategy and commitments, and
planning for a range of potential economic outcomes. The Group also assesses
the financial solvency of potential customers, suppliers, or partners before
proceeding with new projects, ensuring no overreliance on any one customer or
supplier. Regular stress testing of the Group's business plan is undertaken
to assess the impact of an economic downturn on operations and to ensure the
Group's financial position remains resilient.
Office Leasing
At 31 December 2025 the Group owned 12 office assets with a net internal area
(NIA) of 6.9m sq ft, representing 68.0% of the value of the Group's property
portfolio. Demand outlook remains robust for Grade A office space, whilst
the constrained development pipeline in surrounding London areas is expected
to support future demand for the Group. These dynamics contributed to
improved market conditions and enabled the Group to achieve its strongest year
of office leasing activity in more than a decade during 2025. Notably, the
Group secured new lease agreements with Visa and HSBC. In addition, JP
Morgan's decision to develop a new EMEA headquarters on the Canary Wharf
estate highlights continued confidence in the district's prime office
location. Collectively, these factors have reduced both the likelihood and
potential impact of this risk to the Group.
Management and mitigation: The Group conducts continuous monitoring and
analysis of market trends, tenant concentration and behaviours to ensure early
identification of emerging risks and opportunities. Strong engagement with
current and potential tenants is maintained to ensure their requirements are
well understood and our office space meets market requirements. Resilience
across the estate is further strengthened through diversification, including
expanded presence in sectors such as healthcare and life sciences, alongside
the provision of flexible, fully fitted and managed workspace solutions
through the MadeFor platform
Financing Risk:
Financial risks are influenced by the broader macro-economic environment and
conditions in the commercial real estate sector. The risks include the cost
and availability of financing, maintenance of appropriate loan to value
metrics, and the potential for reductions in revenue and asset valuations
during periods of economic or market stress which could adversely affect the
Group's ability to secure the required funding and maintain liquidity to
support ongoing operations and funding of developments.
Whilst the economy continues to experience subdued growth, the past year has
seen a marked improvement in leasing across the Group's office portfolio and
uplifts in asset valuations, improving the Group's position to manage
financial risks.
Management and mitigation: Financial management includes regular forecasting
and cashflow budgeting processes to monitor the Group's financial performance
and funding requirements and take appropriate actions as required.
Financial covenants are regularly monitored and assessed in conjunction with
any new deals or financing. The Group continues to collaborate with its
lending partners whilst also benefiting from the long-term support of its
ultimate parents, Brookfield and QIA, who have reaffirmed their commitment to
provide financial support where necessary for the Group to meet its
liabilities for a period of at least 12 months from the approval of the
financial statements.
Political and Regulatory Risk
The UK political landscape continues to evolve with government led changes to
tax legislation, directly impacting the Group's cost base as well as those of
our tenants which may contribute to insolvency and credit risk among tenant
groups. Ongoing uncertainty is expected at both the local and national
government levels increasing the risk of further volatility and uncertainty.
Due to these developments the Group has increased the risk grading from low
to medium likelihood and impact.
Management and mitigation: The Group conducts continuous monitoring and impact
assessments over changes to public policy and regulations. Further
safeguards include the development and maintenance of appropriate company
policies, and the provision of specialised staff training against compliance
requirements. Continued investment in the risk and internal controls teams
provide targeted assurance over control effectiveness and alignment with best
practices. On a local scale, the Group engages continually with the London
Borough of Tower Hamlets council to ensure awareness of any local regulatory
changes.
Technology and Cyber Security Risk
The external cyber threat landscape continues to evolve in scale and
complexity. Several high profile cyberattacks
across a range of industries have been reported across the year demonstrating
an escalation in the frequency and sophistication of cybercrime activity.
This underscores the need for robust, continuously evolving cyber defences
to protect the Group's operations, tenant data, commercial relationships and
reputation. The Group recognises the rapid evolution of technology and
information systems, particularly with the emergence of AI capabilities, and
ongoing evaluation of technology enhancements will be a component of continued
success.
Management and mitigation: The Group continually evaluates opportunities to
harness new technologies to improve operational efficiencies and enhance the
customer experience, and an IT investment committee regularly appraises new
business cases. Cyber risks are managed through a multilayered control
approach adapted to the evolving threat landscape. Core controls include
robust policies, mandatory cyber security training for all employees, in
addition to the use of market leading third-party providers to maintain a
strong and responsive security program. The Group also conducts regular
business continuity planning and scenario analysis for critical systems to
improve preparedness for technology failures or cyber incidents.
Principal Risks - Internal:
Sustainability
The Group places strong emphasis on sustainability as a strategic business
objective which aligns with the values of our key stakeholders and tenants.
Our ESG programme is guided by four key focus areas: Climate Action,
Creating Space for Nature, Driving Circularity and Social Impact, coupled with
a long-term ambition to achieving net-zero carbon emissions by 2040.
The most significant risks relate to delivering the Group's ESG programme and
meeting sustainability target Metrics. In addition to ensure accurate and
timely ESG Reporting in line with regulatory requirements, compliance with
building-performance requirements. Failure to meet these targets could
result in reputational damage and harm the Group's relationships with tenants,
suppliers, and other stakeholders. Inaccurate claims around sustainable
practices could result in fines under the Green Code, leading to both adverse
financial and reputational impact. The Group continues to make progress
against its ESG programme as well as evolutions in the Group's net zero
pathway, resulting in the reduction of the risk grading to medium likelihood
and impact
Management and mitigation: The Group's dedicated ESG team maintain proactive
awareness and response to emerging risks, evolving regulations and industry
trends that may pose a threat to our ESG goals. Practical risk mitigations
include supplier rationalisation and training to strengthen alignment with ESG
targets.
Operational
The Group's operational risks reflect the scale and mixed-use complexity of
the Canary Wharf Estate. Effective integration of facilities, infrastructure
and utilities management is essential to coordinate service delivery and
minimise disruption for tenants, residents and visitors.
Management and mitigation: The Group manages operational risks through its
deep understanding of the Canary Wharf estate, gained from developing and
managing its assets over their full lifecycle. Operational resilience is
reinforced through continuous monitoring of utilities and infrastructure,
close coordination with service providers, and strong in house capabilities
across facilities, infrastructure engineering, utilities and waste management.
A dedicated ISO 22301 certified resilience team underpins incident
management and business continuity planning, complemented by robust
governance, an integrated estate management strategy and ongoing development
of operational teams to maintain reliable service provision for tenants,
residents and visitors.
People, Culture & Customers
The Group operates in a competitive and evolving labour market, where access
to skilled and diverse talent underpins the delivery of high-quality services
and operations. Changing workforce expectations, increased competition for
specialist skills and new ways of working continue to shape employee needs and
behaviours. Maintaining a strong, inclusive culture that supports colleague
development and wellbeing is therefore key to sustaining service standards,
and the delivery of the Group's strategic ambitions.
Management and mitigation: The Group fosters a positive, inclusive and
engaging culture, supported by well-established policies, employee wellbeing
forums, and a comprehensive programme of equity, diversity and inclusion
initiatives. Recruitment processes include assessing alignment with company
values, and ongoing career development is supported by employee performance
assessments and access to a Career Development Framework. Further measures
include structured succession planning, and bespoke employee training to
continually develop skills and uphold service quality.
Health, Safety & Security
The Group delivers a complex programme of construction, engineering and
maintenance across its real estate portfolio, which involve a wide range of
health, safety and security risks for staff, tenants and the general public.
The Canary Wharf estate has an average weekly footfall of 1.5 million people
and is a significant transport hub which increases the scope of security risks
which could impact the Estate. The ongoing diversification towards a mixed-use
Estate and catering to a growing range of tenant groups means that the risk
landscape continues to evolve.
Management and mitigation: The Group places the highest priority on the safety
and security of visitors and employees alike by continuing to commit the
resources required to deliver a world-class security capability. Our
in-house security team is supported by market-leading technologies and a
dedicated resilience team certified to ISO 22301 to manage critical incidents
and minimise operational disruption. Regular operational resilience and
stress tests are carried out to validate preparedness and assure the
effectiveness of response arrangements. Employees are required to undertake
training on security and resilience awareness and fire awareness. In
addition, the Group utilises Everbridge, a Critical Event Management platform,
to support the management of critical events and enhance organisational
resilience, ensuring that all staff can be contacted and located in an
emergency.
Financing risk
The broader economic cycle inevitably leads to movements in inflation,
interest rates and bond yields.
The company has issued debenture finance in sterling at both fixed and
floating rates and uses interest rate swaps to modify its exposure to interest
rate fluctuations. All borrowings are denominated in sterling.
The company enters into derivative financial instruments solely for the
purposes of hedging its financial liabilities. No derivatives are entered
into for speculative purposes.
The company is not subject to externally imposed capital requirements.
The company's securitisation is subject to a maximum loan minus cash to value
('LMCTV') ratio covenant.
The maximum LMCTV ratio is 100.0% but there is also a cash trap covenant of
50.0%. Based on the 31 December 2025 valuations of the properties upon which
the company's notes are secured, the LMCTV ratio at the interest payment date
in January 2026 was 44.8%. The securitisation is not subject to a minimum
interest coverage ratio. A breach of financial covenants can be remedied by
depositing eligible investments (including cash). No breach of financial
covenants has taken place in this period
STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2025
2025 2024
Note £ £
Administrative expenses (31,853) (30,688)
OPERATING LOSS (31,853) (30,688)
Interest receivable from group companies 3 62,021,178 61,777,251
Bank interest receivable 3 36,454 28,710
Interest payable on securitised debt 4 (61,914,791) (61,663,799)
Hedge reserve recycling 4 (10,135,393) (10,095,584)
LOSS BEFORE TAX (10,024,405) (9,984,110)
Tax on loss 6 - -
LOSS FOR THE FINANCIAL YEAR (10,024,405) (9,984,110)
OTHER COMPREHENSIVE INCOME FOR THE YEAR
Hedge reserve recycling 13 10,135,393 10,095,584
OTHER COMPREHENSIVE INCOME FOR THE YEAR 10,135,393 10,095,584
TOTAL COMPREHENSIVE INCOME FOR THE YEAR 110,988 111,474
The numbered notes 1 to 17 form part of these financial statements.
STATEMENT OF FINANCIAL POSITION
as at 31 December 2025
2025 2024
Note £ £
CURRENT ASSETS
Debtors:
Amounts falling due after more than one year 7 997,845,103 951,493,272
Amounts falling due within one year 7 31,886,300 33,575,660
Cash at bank and in hand 3,110,724 3,017,545
1,032,842,127 988,086,477
Creditors:
Amounts falling due within one year 8 (29,043,765) (30,750,933)
NET CURRENT ASSETS 1,003,798,362 957,335,544
TOTAL ASSETS LESS CURRENT LIABILITIES 1,003,798,362 957,335,544
Creditors:
Amounts falling due after more than one year 9 (997,845,102) (951,493,272)
NET ASSETS 5,953,260 5,842,272
CAPITAL AND RESERVES
Called up share capital 12 50,000 50,000
Hedging reserve 13 (96,763,916) (106,899,309)
Retained earnings 13 102,667,176 112,691,581
5,953,260 5,842,272
The numbered notes 1 to 17 form part of these financial statements.
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2025
Called up Hedging Retained Total
share capital reserve earnings equity
£ £ £ £
At 1 January 2025 50,000 (106,899,309) 112,691,581 5,842,272
Loss for the year - - (10,024,405) (10,024,405)
Hedge reserve recycling (Note 13) - 10,135,393 - 10,135,393
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - 10,135,393 (10,024,405) 110,988
AT 31 DECEMBER 2025 50,000 (96,763,916) 102,667,176 5,953,260
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2024
Called up Hedging Retained Total
share capital reserve earnings equity
£ £ £ £
At 1 January 2024 50,000 (116,994,893) 122,675,691 5,730,798
Loss for the year - - (9,984,110) (9,984,110)
Hedge reserve recycling (Note 13) - 10,095,584 - 10,095,584
TOTAL COMPREHENSIVE INCOME FOR THE YEAR - 10,095,584 (9,984,110) 111,474
AT 31 DECEMBER 2024 50,000 (106,899,309) 112,691,581 5,842,272
The notes numbered 1 to 17 form part of these financial statements.
NOTES TO THE FINANCIAL STATEMENTS
for the year ended 31 December 2025
1. GENERAL INFORMATION
Canary Wharf Finance II plc is a public company limited by shares incorporated
in the UK under the Companies Act 2006 and registered in England and Wales at
One Canada Square, Canary Wharf, London, E14 5AB.
The nature of the company's operations and its principal activities are set
out in the Strategic Report.
2. ACCOUNTING POLICIES
2.1 Basis of preparation of financial statements
The financial statements have been prepared under the
historical cost convention, modified to include certain items at fair value
and in accordance with United Kingdom Accounting Standards (United Kingdom
Generally Accepted Accounting Practice, including FRS 102 "the Financial
Reporting Standard applicable in the United Kingdom and Republic of Ireland").
The preparation of financial statements in compliance with FRS 102 requires
the use of certain critical accounting estimates. It also requires
management to exercise judgement in applying the company's accounting policies
(see Note 3).
The principal accounting policies have been applied consistently throughout
the year and the preceding year and are summarised below:
2.2 Going concern
Having made the requisite enquiries and assessed the resources at the disposal
of the company, the directors have a reasonable expectation that the company
will have adequate resources to continue its operation for the foreseeable
future.
The balance sheet shows a net current asset position of £1,003,798,362 and
the Company has issued securities which are backed by commercial mortgages
over certain properties within the Canary Wharf Estate. These properties are
let on long term leases to a diverse range of credit worthy tenants.
Accordingly, they continue to adopt the going concern basis in preparing the
financial statements.
2.3 Cash flow statement
The company has taken the exemption from preparing the cash flow statement
under Section 1.12(b) as it is a member of a group where the parent of the
group prepares publicly available consolidated financial statements which are
intended to give a true and fair view.
2.4 Segment information
The company has a single operating segment, being the provision of finance to
the Canary Wharf Group, comprising Canary Wharf Group plc and its
subsidiaries. All activities take place within the United Kingdom. Therefore,
no segmental information has been prepared.
2.5 Financial Instruments
Loans receivable
Loans receivable are recognised initially at the transaction price including
transaction costs. Subsequent to initial recognition, loans receivable are
stated at amortised cost with any difference between the amount initially
recognised and redemption value being recognised in the Income Statement over
the period of the loan, using the effective interest method.
Where loans are designated as fair value through profit or loss ('FVTPL') they
are recognised at fair value. The fair value is assessed as the present
value of most likely cash flows. Any movements are recognised in the income
statement.
Trade and other payables
Trade and other creditors are stated at amortised cost.
Borrowings
Loans payable are recognised initially at fair value less attributable
transaction costs. Subsequent to initial recognition, loans receivable are
stated at amortised cost with any difference between the amount initially
recognised and redemption value being recognised in the Income Statement over
the period of the loan, using the effective interest method.
Where loans are designated as fair value through profit or loss ('FVTPL') they
are recognised at fair value. The fair value is assessed as the present
value of most likely cash flows. Any movements are recognised in the income
statement.
Derivative instruments
The company uses interest rate derivatives to help manage its risks of changes
in interest rates. The company does not hold or issue derivatives for
trading purposes.
Following the adoption of the IFRS 9 measurement option, the floating rate
securitised notes are measured at fair value and so no hedging relationships
are possible. The changes in the fair value of the derivative instruments
are recognised in the income statement.
Prior to the adoption of IFRS 9, the financial instruments were carried under
the measurement criteria of IAS 39. The B3 and C2 financial instruments were
designated as effective hedges of the corresponding notes and carried at Fair
Value through Other Comprehensive Income. On adoption, the hedging
relationships were terminated and the financial instruments were reclassified
as fair value accounting for the floating rate securitised debt. The balance
in the hedging reserve is being amortised over the remaining life of the
corresponding notes.
3. AUDITORS' REMUNERATION
2025 2024
£ £
Fees to the company's auditor for the interim financial statements 31,200 30,900
Auditors' remuneration of £80,340 (2024 - £78,000) for the year end audit of
the company has been borne by another group undertaking.
4. INTEREST RECEIVABLE AND SIMILAR INCOME
2025 2024
£ £
Interest receivable from group companies 62,021,178 61,777,251
Bank interest receivable 36,454 28,710
62,057,632 61,805,961
5. INTEREST PAYABLE AND SIMILAR CHARGES
2025 2024
£ £
Interest payable on securitised debt (Note 11) 61,914,791 61,663,799
Hedge reserve recycling 10,135,393 10,095,584
72,050,184 71,759,383
On 22 January 2024, the company made a partial repayment of £77.1m of the A1
and a partial repayment of £192m of the A3 securitisation notes.
The repayment released security over 10 Cabot Square following the execution
of the amendment of lease arrangements with Barclays Bank Plc.
6. FAIR VALUE ADJUSTMENTS
2025 2024
£ £
Derivative financial instruments 7,444,052 (49,217,470)
Securitised debt 55,873,351 67,595,290
Loan to fellow subsidiary undertaking (63,317,403) (18,377,820)
- -
7. TAXATION
2025 2024
£ £
Deferred tax
TAXATION ON PROFIT ON ORDINARY ACTIVITIES - -
FACTORS AFFECTING TAX CHARGE FOR THE YEAR
The tax assessed for the year is different to the standard rate of corporation
tax in the UK of 25% (2024 - 25%). The differences are explained below:
2025 2024
£ £
Loss on ordinary activities before tax (10,024,405) (9,984,110)
Loss on ordinary activities multiplied by standard rate of corporation tax in (2,506,101) (2,496,028)
the UK of 25% (2024 - 25%)
EFFECTS OF:
Fair value movements not subject to tax 2,533,848 2,523,897
Group relief (27,747) (27,869)
TOTAL TAX CHARGE FOR THE YEAR - -
FACTORS THAT MAY AFFECT FUTURE TAX CHARGES
There were no factors that affected the tax charge for the year which has been
calculated on the profits on ordinary activities before tax at the standard
rate of corporation tax in the UK of 25% (2024 - 25%).
8. DEBTORS
2025 2024
£ £
DUE AFTER MORE THAN ONE YEAR
Loan to fellow subsidiary undertaking due after more than one year 997,845,103 951,493,272
997,845,103 951,493,272
2025 2024
£ £
DUE WITHIN ONE YEAR
Other amounts owed to fellow subsidiaries 4,194,021 2,891,559
Loan to fellow subsidiary undertaking due within one year 15,766,816 18,543,910
Accrued interest on loan to fellow subsidiary undertaking 11,907,608 12,140,191
Prepayments and accrued income 17,855 -
31,886,300 33,575,660
2025 2024
£ £
The loan to a fellow subsidiary undertaking comprises:
At 1 January 970,037,182 1,280,561,787
Repaid in the year (18,543,910) (325,526,905)
Amortisation of issue premium (1,496,126) (1,348,326)
Movement in accrued financing expenses 297,370 (2,027,194)
Fair value adjustment 63,317,403 18,377,820
At 31 December 1,013,611,919 970,037,182
Comprising:
2025 2024
£ £
Loan to fellow subsidiary undertaking due after more than one year 997,845,103 951,493,272
Loan to fellow subsidiary undertaking due within one year 15,766,816 18,543,910
1,013,611,919 970,037,182
The fair value of the loans to group undertakings at 31 December 2025 was
£1,024,397,153 (2024 - £973,174,715), calculated by reference to the fair
values of the Company's financial liabilities. In the event that the company
were to realise the fair value of the securitised debt and the derivative
financial instruments, it would have the right to recoup its losses as a
repayment premium on its loans to CW Lending II Limited. As such, the fair
value of the loans to group undertakings is calculated to be the sum of the
fair value of the securitised debt and the fair value of the derivative
financial instruments.
Amounts owed to the group undertakings are interest free and repayable on
demand.
The loan to the company's fellow subsidiary undertaking was made in tranches,
the principal terms of which are:
Class Interest Effective interest Repayment 2025 2024
£m £m
A1 6.465% 5.700% By instalment to 2030 57.0 68.7
A3 5.962% 5.746% By instalment 2032-2035 208.0 208.0
A7 5.124% 5.308% January 2035 222.0 222.0
B 6.810% 6.208% By instalment to 2030 93.3 100.2
B3 5.173% 5.445% January 2035 77.9 77.9
C2 5.452% 6.069% January 2035 239.7 239.7
D2 5.812% 6.753% January 2035 125.0 125.0
1,022.9 1,041.5
Unamortised premium 6.3 7.8
Accrued financing costs 11.2 10.9
1,040.4 1,060.1
The A7, B3, C2 and D2 tranches of the intercompany loan are carried at fair
value. The A1, A3 and B tranches are carried at amortised cost. The total
fair value of the intercompany loan was £1,024,397,153
(2024: £973,174,715).
The total carrying value of the loan is £1,014m. Of the carrying value of
£1,014m, £365m is carried at
amortised cost and £649m is carried at fair value.
The carrying value of financial assets represents the Company's maximum
exposure to credit risk.
The maturity profile of the Company's contracted undiscounted cash flows is as
follows:
2025 2024
£ £
Within one year 77,917,663 81,890,007
In one to 2 years 74,712,455 77,917,648
In 2 to 5 years 296,309,447 223,856,604
In 5 to 10 years 1,077,453,624 533,804,465
In 10 to 20 years - 690,813,620
At 31 December 1,526,393,189 1,608,282,344
2025 2024
£ £
Comprising:
Principal repayments 1,022,928,574 1,041,472,486
Interest repayments 503,464,615 566,809,858
At 31 December 1,526,393,189 1,608,282,344
The above table contains undiscounted cash flows (including interest) and
therefore results in a higher balance than the carrying values or fair values
of the intercompany debt.
Other amounts owed by the group undertakings are interest free and repayable
on demand.
9. CREDITORS: Amounts falling due within one year
2025 2024
£ £
Securitised debt (Note 11) 15,766,816 18,543,912
Trade Creditors 618 7,500
Amounts owed to group undertakings 1,309,399 -
Accruals and deferred income 11,966,932 12,199,521
29,043,765 30,750,933
Amount owed to the group undertakings are
interest free and repayable on demand.
On 22 January 2025, the company made a partial
repayment of £77.1m of the A1 and a partial repayment of £192m of the A3
securitisation notes. The repayment released security over 10 Cabot Square
following the execution of the amendment of lease arrangements within Barclays
Bank plc.
On the same date, the same amounts have been repaid by a fellow subsidiary
undertaking to the company in order to facilitate the repayments of the loan
notes.
10. CREDITORS: Amounts falling due after more than one year
2025 2024
£ £
Securitised debt (Note 11) 956,075,565 917,167,787
Derivative financial instruments (Note 12) 41,769,537 34,325,485
997,845,102 951,493,272
11. SECURITISED DEBT
The amounts at which borrowings are stated
comprise:
2025 2024
£ £
At 1 January 935,711,699 1,197,018,834
Repaid in the year (18,543,912) (325,526,905)
Amortisation of issue premium (1,496,126) (1,348,326)
Movement in accrued financing expenses 297,370 (2,027,194)
Fair value adjustment 55,873,350 (67,595,290)
At 31 December 971,842,381 935,711,699
2025 2024
£ £
Payable within one year or on demand 15,766,816 18,543,912
Payable after more than one year 956,075,565 917,167,787
971,842,381 935,711,699
The company's securitised debt was issued in
tranches, with notes of classes A1, A3, A7, B, B3, C2 and D2 remaining
outstanding. The A1, A3 and B notes were issued at a premium which is being
amortised to the income statement over the life of the relevant notes. At 31
December 2025 £6,269,602 (2024 - £7,765,728) remained unamortised.
At 31 December 2025 there were accrued financing
costs of £11,173,227 (2024 - £10,875,858) relating to previous contractual
increases in margins.
The notes are secured on 5 properties at Canary Wharf, owned by fellow
subsidiary undertakings, and the rental income stream therefrom.
The securitisation continues to have the benefit of an arrangement with AIG
which covers the rent in the event of a default by the tenant of 33 Canada
Square over the entire term of the lease. At 31 December 2025, AIG had
posted £15,271,307as cash collateral in respect of this obligation.
The company also has the benefit of a £300.0m liquidity facility provided by
Lloyds Bank plc, under which drawings may be made in the event of a cash flow
shortage under the securitisation.
At 31 December 2025 the securitised debt comprised the following:
Tranche Principal Fair value Interest Effective interest Repayment
£m £m
A1 57.0 60.0 6.455% 5.690% By instalment to 2030
A3 208.0 218.5 5.952% 5.736% By instalment 2032-2035
A7 222.0 213.7 Floating 5.298% January 2035
B 93.3 96.9 6.800% 6.198% By instalment to 2030
B3 77.9 70.2 Floating 5.435% January 2035
C2 239.7 213.0 Floating 6.059% January 2035
D2 125.0 110.3 Floating 6.743% January 2035
1,022.9 982.6
At 31 December 2024 the securitised debt comprised the following:
Tranche Principal Fair value Interest Effective interest Repayment
£m £m
A1 68.7 71.4 6.455% 5.692% By instalment to 2030
A3 208.0 214.7 5.952% 5.736% By instalment 2032-2035
A7 222.0 190.9 Floating 5.298% January 2035
B 100.2 101.6 6.800% 6.409% By instalment to 2030
B3 77.9 63.7 Floating 5.435% January 2035
C2 239.7 196.5 Floating 6.059% January 2035
D2 125.0 99.9 Floating 6.743% January 2035
1,041.5 938.7
Interest on the A1 notes, A3 notes and B notes is fixed until maturity.
Interest on the floating notes is repriced every 3 months.
Interest on the floating rate notes is at 3 month SONIA plus a credit
adjustment spread. The margins on the notes are: A7 notes - 0.19% per annum;
B3 notes - 0.28% per annum; C2 notes - 0.55% per annum; and D2 notes - 0.84%
per annum.
The floating rate notes are hedged by means of interest rate swaps and the
hedged rates plus the margins are: A7 notes - 5.3984%; B3 notes - 5.5825%; C2
notes - 6.2666%; and D2 notes - 7.0605%.
The effective interest rates include adjustments for the hedges and the issue
premium.
The floating rate notes are carried at FVTPL. The fixed rate notes are
carried at amortised cost. The total fair value of the debt is £939m. Of
the carrying value of £972m, £365m is carried at amortised cost and £607m
is carried at fair value.
The fair values of the sterling denominated notes have been determined by
reference to prices available on the markets on which they are traded.
The maturity profile of the company's contracted undiscounted cash flows is as
follows:
2025 2024
£ £
Within one year 69,626,610 79,319,448
In one to 2 years 65,384,348 72,657,249
In 2 to 5 years 275,113,862 204,690,975
In 5 to 10 years 1,063,634,375 480,747,721
In 10 to 20 years - 682,869,270
At 31 December 1,473,759,195 1,520,284,663
2025 2024
£ £
Comprising:
Principal repayments 1,022,928,574 1,041,472,487
Interest repayments 450,830,621 478,812,176
At 31 December 1,473,759,195 1,520,284,663
The above table contains undiscounted cash flows (including interest) and
therefore results in a higher balance than the carrying values or fair values
of the borrowings.
The weighted average maturity of the debentures at 31 December 2025 was 7.92
years (2024 - 8.77 years). The debentures may be redeemed at the option of
the company in an aggregate amount of not less than £1m on any interest
payment date subject to the current rating of the debentures not being
adversely affected and certain other conditions affecting the amount to be
redeemed.
After taking into account the interest rate hedging arrangements, the weighted
average interest rate of the company at 31 December 2025 was 6.0% (2024 -
6.1%).
Details of the derivative financial instruments are set out in Note 11.
Details of the company's risk management policy are set out in the Strategic
Report.
12. DERIVATIVE FINANCIAL INSTRUMENTS
The company uses interest rate swaps to hedge exposure to the variability in
cash flows on floating rate debt caused by movements in market rates of
interest. At 31 December 2025 the fair value of these derivatives resulted
in the recognition of a net liability of £41,769,537 (2024 - £34,325,485).
13. SHARE CAPITAL
2025 2024
£ £
Allotted, called up and fully paid
50,000 (2024 - 50,000) Ordinary shares of £1.00 each 50,000 50,000
14. RESERVES
Hedging Reserve
The company holds swaps for the B3, C2, A7 and D2 notes. From July 2019, with
the adoption of measurement criteria of IAS39, the company carries the B3, C2,
A7 and D2 notes and the associated tranches of its intercompany loans at fair
value through profit and loss. There is no continuing hedge accounting.
The hedging reserve balance comprises the unamortised balance of the
discontinued hedge accounting on for the B2, C1, B3 and C2 notes.
Hedge accounting was applied for swaps on the B2 and C1 notes between 2005 and
2007, when the B2 and C1 notes were replaced by B3 and C2 notes. The
combined balance in the hedging reserve at that time was a credit balance of
£14,680,000, which is being amortised to October 2027, the remaining life of
the B2 and C1 notes. At the year end, the unamortised balance was £494,332
(2024: £805,826).
Hedge accounting was applied for swaps on the B3 and C2 notes between 2007 and
2019. The balance of the hedge reserve associated with these notes was a
debit balance within capital and reserves of £165,163,014, which is being
amortised until January 2035, the remaining life of the B3 and C2 notes. At
the year end, the unamortised balance was £97,258,248 (2024: £107,705,135).
Distributable reserves
The distributable reserves of the company differ from its retained earnings as
follows:
2025 2024
£ £
Retained earnings 102,667,176 112,691,581
Hedging reserve (96,763,916) (106,899,309)
Distributable reserves 5,903,260 5,792,272
15. OTHER FINANCIAL COMMITMENTS
As at 31 December 2025 and 31 December 202 the company had given security over
all its assets, including security expressed as a first fixed charge over its
bank accounts, to secure the notes referred to in Note 10.
17. CONTROLLING PARTY
The company's immediate parent undertaking is Canary Wharf Finance Holdings
Limited.
As at 31 December 2025, the smallest group of which the company is a member
and for which group financial statements are drawn up is the consolidated
financial statements of Canary Wharf Group Investment Holdings plc. Copies
of the financial statements may be obtained from the Company Secretary, One
Canada Square, Canary Wharf, London E14 5AB.
The largest group of which the company is a member for which group financial
statements are drawn up is the consolidated financial statements of Stork
HoldCo LP, an entity registered in Bermuda and the ultimate parent undertaking
and controlling party. Stork HoldCo LP is registered at 73 Front Street, 5th
Floor, Hamilton, HM12, Bermuda.
Stork HoldCo LP is controlled as to 50% by Brookfield Property Partners LP and
as to 50% by Qatar Investment Authority.
The directors have taken advantage of the exemption in paragraph 33.1A of FRS
102 allowing the Company not to disclose related party transactions with
respect to other wholly owned group companies.
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