Paul Reichmann, a billionaire who has never shied from adventurous property developments, saw his dreams come true this week after it was announced that London's Canary Wharf landmark would come to the London Stock Exchange with an initial public offering (IPO). In a listing that will value the company at GBP2.6 billion (about HK$32.37 billion), the move is the culmination of a story that has seen Canary Wharf go from being the darling of the British Government in the 1980s to a victim of a deep recession in the early 1990s, with Mr Reichmann being forced to cede control of the estate to liquidators. Not only is his success in winning back the 81-acre estate - some three years after he lost it - commendable, but, in achieving such a huge valuation, he has shown that he is still one of the world's canniest property developers. 'He's absolutely delighted that his original vision is coming to fruition,' said Peter Anderson, managing director of finance at Canary Wharf. 'There's no question that his original design concept is being executed today.' The 13.5 million square foot office complex, which from 2002 will also house the new worldwide headquarters of HSBC Holdings, has undergone a rapid transformation. Once part of a bustling port, Canary Wharf - so called because much of the produce first shipped to it was from the Canary Islands - had degenerated into redundant wasteland and suffered disinvestment in the 1970s. As part of a government plan to rebuild depressed areas, Mr Reichmann, who with his family ran Canada's Olympia & York, was selected in 1987 to transform the site into a flourishing centre for commerce and industry. With the five-million-square-feet First Canadian Place commercial development in Toronto under his belt, and New York's World Financial Center also as a credit to his name, Mr Reichmann seemed the perfect candidate. But the plan failed dismally. In 1988, Britain's booming economy reached its peak and began slipping into decline, and bankers who had backed the project started leaving. By 1992, following the collapse in the property market, Olympia & York was forced into legal protection, and Canary Wharf fell into administration. A consortium of international banks took control of the complex, which was facing huge debts, to try and recoup as best they could any feasible return from the project until a willing buyer could be found. But willing buyers seemed few and far between, and it was not until the economy started picking up again about three years later in 1995 that the banks started receiving expressions of interest. Mr Reichmann, benefitting from a recapitalisation from investors, also saw his own fortunes picking up. In competition with at least two other bids, including one involving Hong Kong property tycoon Li Ka-shing, Mr Reichmann drew on the backing of Saudi billionaire Prince Al Waleed bin Talal bin Abdulaziz al Saud, the Loews Corp's CNA Financial, the Franklin Mutual Series Fund, and affiliates of Republic New York to launch an audacious GBP800 million bid. The offer succeeded, and Mr Reichmann, as executive chairman of the new Canary Wharf Group, resumed control of his pet project. Today, about 61 per cent of the project is built or about to start construction, and the prospects for the project appear favourable as progress continues on new transport links that will make the site more accessible. But the flotation comes as Britain again is flirting with recession, and consumer confidence remains sluggish. Mr Anderson insists that unlike the early 1990s, Canary Wharf will not fall victim to the same pressures that forced it into administration in 1992. He estimates there is pent-up demand for 11 million sq ft underpinning office property leasing, and big business is taking strategic decisions about property investment that is less vulnerable to economic considerations. 'HSBC took a major building here. The consolidation from 20 different sites into a single building gives them operating efficiency,' he said. Analysts agree, arguing that Canary Wharf is unique in that it controls the level of supply, building only if there is demand, and that it consistently undercuts other commercial locations. 'If the economic outlook for 1999 and 2000 turns out to be considerably worse than people are forecasting, there will be a problem of oversupply in other markets,' said Matt Oakley, head of commercial research at FPD Savills. 'At Canary Wharf, because there is very little overhang, there is no prospect of property speculation developing.' As a consequence, endorsement for the flotation is high, and with the Reichmann-led consortium only allowing 25 per cent of the shares to be floated, there is likely to be stiff demand, driving up the price at the initial public offering.