Vikings are again in London to plunder the property market – in one other vote of confidence for the capital: MAGGIE PAGANO

The Vikings are back in town, this time taking a huge bet on the future of London rather than plundering the capital as they did centuries ago.

In its second property raid in just two months, Norway’s sovereign wealth fund – the world’s biggest – is buying a quarter of the prestigious Covent Garden estate for £570million.

The investment by Norges Bank Investment Management may be small change for the fund, which is worth £1.5trillion from its oil and gas industry. But for central London it’s a great coup, a vote of confidence in the capital.

This latest deal – to buy a quarter of the £2.7billion Covent Garden portfolio of landlord Shaftesbury Capital – brings Norges a share of more than 220 shops and theatres, such as the Royal Opera House at the heart of the West End.

It follows Norges buying a £306million stake in London’s Mayfair from the Duke of Westminster’s Grosvenor property giant.

Together with other properties on Regent Street, Norges has investments in London worth around a billion pounds.

Viking invasion: Norway’s sovereign wealth fund is buying a quarter of London’s prestigious Covent Garden estate for £570m

The Norwegians can obviously smell a change in mood, and maybe a bargain too? Covent Garden is bustling once again, enjoying a real uptick in tourism since the pandemic with one million visitors every day over Christmas.

As Jayesh Patel, head of Norges’ UK real estate arm, says, the latest stake underscores its belief in London’s strength (perhaps they can bring their legendary tidiness to clean up the district too).

And there’s more good news less than half a mile away in the City.

Once again, the Square Mile has come second to New York in think-tank Z/Yen Group’s global financial centres index.

But for the first time in years, the City is nibbling closer to the core of the Big Apple, which has a lead that has now narrowed to seven points.

More pertinently, the City still dominates the European rankings, with a 21-point lead over Frankfurt. Brexit, what Brexit? Rather than crash and burn as the scaremongers wanted us to believe, the City rated highly in many industry sectors and came top in banking.

What’s more, London’s fintech industry is just one point behind New York. As we noted this week, even the London Stock Exchange looks as though it’s going through a turnaround.

Yet there’s no room for complacency. London’s capital markets still have structural problems and legacy issues which authorities – and regulators – are doing their best to grapple with.

By far the most interesting data to emerge from the index was the rapid growth of financial centres in Asia and the Middle East, which dominated the top 15 slots. Dubai, for example, has shot up four places to 12th.

And it’s from these centres that London will face more competition in future as they grow stronger, attracting more of their own capital.

Which is why the Government must tread carefully in how far it goes with its punitive tax regime – as we are seeing daily, thousands of the UK’s brightest are heading to Dubai and other hotspots. A brain drain is the last thing we need.

As Norway’s Labour government also shows us, if you impose heavy wealth taxes on your most successful entrepreneurs, they will flee to Lake Como.

These are assets with feet.

An empty high street

Covent Garden may be doing well but most of the country’s town centres are being hollowed out.

As peers in the House of Lords have warned, soon there won’t be any businesses left on the High Street to tax.

One of the Chancellor’s madder plans is to make big properties pay much higher rates – which would end up hitting larger stores such as M&S.

It means they are now threatening to leave town. In turn, this would have a knock-on effect on smaller shops as they benefit from the magnet of larger shops.

About 35 shops shut for good every day last year, with closures more than offsetting the openings.

Business rates need to be slashed.

Wrong move

As expected, the Bank of England chickened out of cutting interest rates.

It cites rising inflation and global uncertainty. This was the wrong decision: recession and higher unemployment are of far greater worry.