Norwegian oil fund buys £570m slice of Covent Garden because it bets on London property market

Norway’s mighty oil fund has bought a quarter of Covent Garden in a fresh bet on London property.

Norges Bank Investment Management, the world’s largest sovereign wealth fund, paid owner Shaftesbury Capital £570million for the 25 per cent stake.

It is just the latest investment in London by the fund, which manages £1.5trillion derived from Norway’s oil and gas revenues and recently did a £306million deal with Grosvenor for a slice of the Duke of Westminster’s holdings in Mayfair.

Norges has now ploughed some £876million into central London property in the past two months.

‘This underscores our belief in the strength of London. Covent Garden is one of the world’s most recognised retail, leisure and cultural destinations,’ said Jayesh Patel, the head of UK real estate at Norges.

The Covent Garden estate, which is centred around the historic vegetable market close to the Royal Opera House, and includes more than 200 shops and 190 bars, restaurants and cafes, will continue to be managed by Shaftesbury, which also owns Carnaby Street and swathes of Soho and Chinatown.

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 

The Covent Garden portfolio is valued at £2.7billion, including debt, while Shaftesbury’s entire estate is worth £5billion. Shares in Shaftesbury jumped 5.6 per cent, or 6.9p, to 124.8p.

Norges already owns stakes in Regent Street and last year took full ownership of the Meadowhall shopping centre in Sheffield in a £360million deal.

Mike Prew, an industry analyst at Jefferies, said that Norges’ investments were ‘a vote of confidence’ in the property market.

Russ Mould, investment director at AJ Bell, said the swoop – so soon after the deal with Grosvenor – ‘could be seen a long-term show of faith in London as a global city and the scarcity value of its prime real estate’.

He noted that Norges is the biggest shareholder in Shaftesbury and a top-ten shareholder in developers Great Portland, Derwent London, British Land, Land Securities and London Metric. 

‘Shaftesbury was created in 2023 through the merger of Shaftesbury and Capital & Counties, and it is tempting to think Norges has the potential to have a say in, or drive, further merger and acquisition activity,’ added Mould.

Shaftesbury has enjoyed a recovery in tourism after the pandemic and reported its busiest-ever Christmas in 2024 with more than 1m visitors a day at peak times.