Qatar fund makes joint approach for Canary Wharf-owner Songbird

* QIA and Brookfield in joint approach to Songbird

* Songbird shares up as much as 22 percent

* Approach described as preliminary (Adds analyst, investor comment, background, updates share price)

By Clare Hutchison and Sarah Young

LONDON, Nov 6 (Reuters) - Qatar Investment Authority and a U.S. investor have approached Canary Wharf-owner Songbird Estates about a possible takeover, a deal which would increase the sovereign wealth fund's presence in London real estate.

Songbird Estates is the majority owner of the Canary Wharf estate, established some twenty-five years ago on former docks as a new financial district. The company is also a part owner of the landmark "Walkie Talkie" skyscraper in the City, London's traditional business area.

Songbird said in a statement on Thursday it would consider the joint approach from the QIA and Brookfield Property Partners LP, which it described as at a preliminary stage.

"The board of Songbird will consider this approach in light of what is in the best interests of the shareholders in the company as a whole and in the meantime Songbird shareholders are advised to take no action," Songbird said.

The QIA already owns 28.6 percent of Songbird, while Brookfield, which operates and invests in office and industrial property, has a 22 percent stake in Canary Wharf Group.

The deal would add to Qatar's already significant presence in London. The Shard, western Europe's tallest skyscraper at about 310 metres (1,016 feet) is one of a string of high profile developments it owns in the city.

Songbird shares surged more than 22 percent to 320 pence, their highest closing price for six years, putting the value of the group at around 2.3 billion pounds.

Songbird in 2010 denied reports that Qatar's sovereign wealth fund had made a $700 million-plus takeover approach.

CONSERVATIVE VALUATION

Peel Hunt analyst James Carswell said the bid had likely to have been prompted by a thriving commercial real estate market in the UK capital, as well as a significant new development planned for the former docklands, which gained approval in July.

"The London market has performed very strongly," Carswell said. "On top of that, you have got the development pipeline - Wood Wharf in particular, it's a really vast site. The valuation on our numbers looks very conservative, so you see a lot of upside there," Carswell said.

The nature of Songbird's shareholder structure has made it a an obvious takeover target, he said.

"People have been talking about it for some time and it now seems to be underway. We think it's quite likely it will go ahead for that reason."

A deal would have to get past Songbird's two other big shareholders, New York investor Simon Glick, who has almost 26 percent and China's sovereign wealth fund, which owns 15.8 percent.

China Investment Corporation did not immediately respond to a request for comment. Glick could not immediately be reached for comment.

Douglas Scott, UK equity investment manager at Kames Capital (Other OTC: CGHC - news) , a top 10 investor in Songbird, said the ownership structure has been a stumbling block for many investors before and could see the attraction of a deal at this point.

"I can see why the Qataris would want to buy it, London is growing and will continue to grow, there is a good opportunity to do some residential stuff and some of the retail has done incredibly well," Scott said.

POPULATION EXPLOSION

Canary Wharf once housed the docks for Britain's imperial shipping trade but most of them closed in the 1970s as Britain's economy stagnated and containerisation of cargo shipping pushed work downstream to deeper ports.

It was taken over in the 1980s by Canadian developer Paul Reichmann at the request of then Prime Minister Margaret Thatcher, who wanted a home for the Wall Street-style banking sector she expected to follow her "Big Bang" financial deregulation policies.

Now (NYSE: DNOW - news) home to Barclays (LSE: BARC.L - news) and HSBC as well as the main European offices of Citi, JPMorgan and Morgan Stanley (Xetra: 885836 - news) , it has a working population of over 100,000 and has one of London's largest retail centres.

Chief Executive George Iacobescu has said the estate could double in size in the near future due to an increase in London's population and investment in the city's infrastructure.

Canary Wharf Group will help to meet demand for more housing with its first residential development Newfoundland and a new 20-acre waterside site at Wood Wharf, with 3,100 homes and office buildings, as well as a school and more retail space.

The estate will also have a station for Crossrail, the new high speed rail link connecting east and west London and major international airport Heathrow.

QIA and Brookfield have until Dec. 4 to make a firm intention to make an offer for the company.

Songbird published strong results earlier this year, saying the value of its buildings and planned developments jumped by nearly half in 2013, on sharp rises in property prices on the back of resurgent economic growth and demand from overseas buyers. (Additional reporting by Carolyn Cohn; editing by Kate Holton and Jane Merriman)