Norway’s sovereign wealth fund, the world’s biggest, has made a fresh bet on the future success of central London, as the country’s investment vehicle struck a £570m deal to buy a quarter of the capital city’s Covent Garden estate.
Norges Bank Investment Management (NBIM), which manages $1.8tn (£1.4tn) and invests government money from the oil industry, announced on Thursday that it had bought a 25% stake in the £2.7bn Covent Garden property portfolio owned by landlord Shaftesbury Capital.
The estate includes more than 220 shops at the heart of London’s West End, which sit alongside theatres and sites such as the Royal Opera House and London Transport Museum that have benefited from a rebound in tourism since the pandemic.
The head of NBIM’s UK real estate arm, Jayesh Patel, said the investment “underscores our belief in the strength of London with the portfolio complementing our other high quality West End investments”.
“Covent Garden is one of the world’s most recognised retail, leisure and cultural destinations and we look forward to supporting Shaftesbury Capital’s management team, with their strong track record of delivering the growth potential of this prime West End estate,” he added.
The deal comes just two months after Norges snapped up a £306m stake in London’s Mayfair district from the Duke of Westminster’s property company, Grosvenor, and brings the Norwegian fund’s investment in the capital city to £875m.
The fund is also a shareholder in Shaftesbury, holding a 25% in the company.
Outside London, Norges became sole owner of the Meadowhall shopping centre in Sheffield last year, after striking a £360m deal with British Land.
Commenting on the latest deal, the Shaftesbury chief executive, Ian Hawksworth, said: “This partnership brings together two long-term investors who have a shared confidence in and ambitions for the growth prospects of the Covent Garden estate and the West End.
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Covent Garden was among the properties that drew in big crowds at Christmas, helping Shaftesbury record its busiest ever holiday shopping period with more than 1 million visitors a day to its portfolio, which sprawls from Covent Garden to Chinatown and Soho.
“As demonstrated by our recent 2024 results, Shaftesbury Capital’s portfolio is anticipated to deliver long-term sustained income and value growth. Backed by a strong balance sheet, we are well positioned to capitalise on market opportunities in London’s West End,” Hawksworth added.
