Shaftesbury Capital sells stake of Covent Garden to Norwegian sovereign

Landlord Shaftesbury Capital has agreed to sell a 25 percent non-controlling interest in London shopping estate Covent Garden to Norges Bank Investment Management (NBIM), the Norwegian sovereign wealth fund.

The transaction is valued at 2.7 billion pounds, aligning with an independent valuation dated December 31, 2024, with gross cash proceeds expected to come to around 570 million pounds. The deal is anticipated to close early April 2025.

Covent Garden’s existing debt of 380 million pounds, comprising unsecured private placement loan notes, will remain within the estate’s group following the transaction’s completion. The estate is expected to have an initial cash balance of approximately 25 million pounds upon finalisation.

In a regulatory filing, Shaftesbury’s chief executive officer, Ian Hawksworth, said the “long-term, strategic partnership with NBIM” demonstrated the “quality” of the company’s portfolio, and brings together two investors “who have a shared confidence and ambitions for the growth prospects of the Covent Garden estate and the West End”.

He added: “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.”

Shaftesbury said it would use the proceeds from the transaction to fuel acquisition opportunities in both Covent Garden and across its portfolio, invest into its existing network and repay outstanding debt, while maintaining access to liquidity.

Situated in the West End of London, Covent Garden represents a location of which 74 percent holds retail and food & beverage units, while 26 percent is made up of office and residential. According to Shaftesbury, the portfolio has a net initial yield of 3.6 percent, an annualised gross income of 104 million pounds and an estimated rental value of 134 million pounds, as of December 31, 2024.