Norway’s sovereign wealth fund has agreed to acquire a 25 per cent stake in London’s Covent Garden estate from property company Shaftesbury Capital for £677 million.
Shaftesbury Capital, which owns Covent Garden and around 40 acres of the West End, will retain control of the landmark estate.
The Times reported the deal, expected to settle in early April, values the Covent Garden portfolio at £2.7 billion—matching the most recent valuation by CBRE in December.
Jayesh Patel, head of UK real estate at Norges Bank Investment Management, which oversees the fund, said the acquisition “underscores our belief in the strength of London”.
The transaction gives Norges access at “book value”, without paying a premium—a reflection of the gap between asset valuations and how stock market investors currently price listed property firms.
Before the announcement, Shaftesbury’s market capitalisation sat 41 per cent below its net asset value, though shares jumped 9.8 per cent on Thursday morning to 129.5p.
They remain at a 35 per cent discount to NAV.
“The company’s growing in terms of dividends and profitability, rents are growing, values are growing,” said Ian Hawksworth, chief executive of Shaftesbury Capital.
“Hopefully over the time that will be recognised by equity investors, but right now the private markets are clearly placing full value on the real estate.”
Shaftesbury Capital, formed from the 2023 merger of Shaftesbury and Capital & Counties, owns more than 600 commercial and residential properties across Covent Garden, Soho and Chinatown.
The sale proceeds will go towards reducing debt and acquiring more assets in the West End, with several buildings currently under review.
The Covent Garden estate comprises 220 buildings, including the historic market, and is home to around 850 tenants.
Approximately 75 per cent are retailers, restaurants and bars, with the remainder made up of residential and office tenants.
Together, they generate £104 million in annual rent, with expectations to rise to £134 million upon lease renewals.
Norges Bank already owns 23.5 per cent of Shaftesbury Capital’s shares, having previously been a shareholder in both merging companies.
The deal follows a string of high-profile acquisitions, including a £306 million investment in the Duke of Westminster’s Mayfair estate in January, and full ownership of Sheffield’s Meadowhall shopping centre after purchasing British Land’s 50 per cent stake for £360 million.
