Norway’s Sovereign Wealth Fund Acquires Stake in Covent Garden
Norway’s substantial oil fund has broadened its London property portfolio by purchasing a significant share of Covent Garden.
Norges Bank Investment Management, the world’s largest sovereign wealth fund, has invested £570 million to acquire a 25 percent stake in the renowned London estate from Shaftesbury Capital.
Continued Investment in London Property Market
This transaction marks the latest in a series of investments in London’s property market by the fund. Norges Bank Investment Management, which oversees £1.5 trillion in assets derived from Norway’s oil and gas revenues, recently finalized a £306 million agreement with Grosvenor for a portion of the Duke of Westminster’s Mayfair holdings.
In the past two months alone, Norges has injected approximately £876 million into prime central London real estate.
Confidence in London’s Prominence
“This investment underscores our confidence in the resilience of London. Covent Garden is globally recognized as a premier destination for retail, leisure, and culture,” stated Jayesh Patel, Head of UK Real Estate at Norges Bank Investment Management.
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The Covent Garden estate, centered around the historic fruit and vegetable market near the Royal Opera House, encompasses over 200 retail outlets and 190 bars, restaurants, and cafes. Shaftesbury Capital, which also manages Carnaby Street and extensive areas of Soho and Chinatown, will retain management responsibilities for Covent Garden.
Stake: The Covent Garden estate – centred around the historic vegetable market close to the Royal Opera House – includes more than 200 shops and over 190 bars, restaurants and cafes
Market Valuation and Share Performance
The Covent Garden portfolio is valued at £2.7 billion, inclusive of debt, while Shaftesbury’s total estate is valued at £5 billion. Following the announcement, shares in Shaftesbury experienced a rise of 5.6 percent, or 6.9 pence, reaching 124.8 pence.
Expanding London Portfolio
Norges already holds investments in Regent Street and last year assumed full ownership of the Meadowhall shopping centre in Sheffield through a £360 million deal.
Industry Analyst Perspectives
Mike Prew, an industry analyst at Jefferies, characterized Norges’ investments as “a vote of confidence” in the current property market conditions.
Russ Mould, Investment Director at AJ Bell, suggested the recent acquisition, following swiftly after the Grosvenor transaction, “could be interpreted as a long-term demonstration of faith in London’s status as a global city and the inherent scarcity of its prime real estate.”
He further noted Norges’ position as the largest shareholder in Shaftesbury and a top-ten shareholder in prominent developers such as Great Portland, Derwent London, British Land, Land Securities, and London Metric.
Potential for Further Market Activity
“Shaftesbury’s formation in 2023, through the merger of Shaftesbury and Capital & Counties, leads to speculation that Norges could potentially influence or instigate further merger and acquisition activity within the sector,” Mould added.
Tourism Recovery and Festive Performance
Shaftesbury has benefited from a resurgence in tourism following the pandemic and reported record visitor numbers during the 2024 Christmas period, exceeding 1 million visitors per day at peak times.