Shaftesbury Capital to sell 25% Covent Garden stake to Norges Bank
Shaftesbury Capital has agreed to sell a 25% stake of its Covent Garden estate to Norges Bank Investment Management (NBIM) as part of a strategic partnership.
Under the terms of the agreement, Shaftesbury Capital will retain management control as well as a controlling 75% interest in the estate.
The transaction values the Covent Garden portfolio at £2.7bn and is expected to generate gross cash proceeds of approximately £570m for Shaftesbury Capital.
Located in the heart of the West End of London, Shaftesbury Capital’s Covent Garden estate is centred around the Piazza, the Market Building, and surrounding streets, including Seven Dials. It is a mixed-use portfolio of assets, with 74% of the property value represented by retail and food and beverage and 26% by office and residential.
The portfolio has a net initial yield of 3.6%, annualised gross income of £104m, and an estimated rental value of £134m as at 31 December 2024. The portfolio comprises some 220 buildings and over 850 units, across 1.4 million sq ft.
Shaftesbury Capital said the proceeds from the transaction may be used for a variety of options, including acquisition opportunities in both Covent Garden and across the wider group, investment into its existing portfolio, and repayment of outstanding debt.
Ian Hawksworth, chief executive of Shaftesbury Capital, said: “We are pleased to announce the formation of a £2.7 billion long-term, strategic partnership with NBIM. This investment by a leading global real estate investor demonstrates the quality of our portfolio. 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.
“Through partnering with private capital, this transaction leverages our operating expertise and assets, enhancing growth and expansion opportunities across our portfolio whilst strengthening our financial position and providing significant optionality to the group.
“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.”
The acquisition marks NBIM’s second major venture into London’s real estate market this year, with the group having taken a stake in a mixed-use property portfolio in Mayfair from Grosvenor for £305.7m.
Jayesh Patel, head of UK real estate at NBIM, added: “We are delighted to announce our investment into the Covent Garden estate, creating a long-term partnership with Shaftesbury Capital. This 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.”