LONDON, Dec 6 (Reuters) - Ratings agency Moody's said on Tuesday it has put UK commercial landlord Canary Wharf's ratings under review for downgrade due to what it said was the worsening outlook for the real estate sector and the more difficult funding environment.
Moody's said it expects drops in office values that could be as high as 10-15% alongside materially increased funding costs and weaker demand for occupational space, and a challenging environment for asset disposal because of weak real estate markets.
Canary Wharf Group Investment Holdings currently has a Baa3 long-term issuer rating. A downgrade would take its rating into junk territory.
The Canary Wharf estate in London is home to some of the world's largest investment banks and financial service providers, including HSBC and JPMorgan.
According to Refinitiv data, the company has $427 million in debt maturing in 2025.
Canary Wharf Group's sterling-denominated April 2025 bond, which carries a coupon of 2.625%, was last yielding 8.714% on Tradeweb, up 13 basis points on the day. It started 2022 below 2.5%. (Reporting by Alun John, editing by Amanda Cooper and Karin Strohecker)