Songbird Estates, the AIM-listed owner of Canary Wharf, today warned it could crack under the strain of its massive debts as the value of its properties plunge in the downturn.

The company insisted it was still meeting the terms of its £880 million loan from Citigroup but admitted "there is a material risk" it will breach them "within the next 12 months".

Songbird shares dived 6¼p or 19% to 27p.

Falling property values have pushed Songbird ever closer to its loan-to-value covenants. The estate has lost 26.5% of its value in the past 12 months, sinking from £6.8 billion in December 2007 to £4.9 billion at the end of 2008.

The biggest casualty was the home of Lehman Brothers, whose value has more than halved since the bank collapsed last September.

The 25-30 Bank Street building was worth just £410 million at its December 2008 valuation, down from £855 million in June and £955 million at the end of 2007.

Songbird racked up losses of £1.8 billion last year against profits of £182 million a year earlier. Its net asset value per share dived 70%.