Norway's Sovereign Wealth Fund Invests $740 Million in London's Covent Garden

Published: Thu, Mar 20, 2025
By: Karen Gilchrist, Chloe Taylor

Norway's $1.8 trillion sovereign wealth fund has made headlines with a significant investment in London's prestigious Covent Garden. On Thursday, the fund announced a deal to acquire a 25% stake in a property portfolio from Shaftesbury Capital, a move highlighting its continued confidence in the U.K. real estate market.

Investment Details

In a joint venture, Norges Bank Investment Management (NBIM), which manages the fund, will pay £570 million (approximately $739 million) for the stake. This acquisition values the entire property portfolio at £2.7 billion. The portfolio consists of around 1.5 million square feet, primarily dedicated to retail and leisure spaces located in the districts of Covent Garden and Seven Dials.

The investment comes on the heels of another substantial purchase earlier this year, where NBIM invested £306 million for a 25% stake in the Grosvenor estate, owned by the Duke of Westminster. This prior investment was valued at £1.2 billion and represented a significant sale to external investors within Grosvenor's historical Mayfair properties.

Market Reaction

Following the announcement, shares of Shaftesbury Capital experienced a notable surge, initially jumping nearly 16% at market opening before settling at an 8.9% increase by 9:55 AM London time.

Jayesh Patel, head of U.K. real estate at NBIM, expressed optimism about the investment, stating, "This investment underscores our belief in the strength of London, with the portfolio complementing our other high-quality West End investments."

Growing Investment in London

With this latest acquisition, the Norwegian sovereign wealth fund's total investment in London for the year has reached a substantial £876 million. This aggressive investment strategy indicates a strong commitment to the London property market, which remains an attractive destination for global investors.

In related news, NBIM also disclosed plans to invest €240 million for a 40% stake in AXA Lifestyle Housing, a company operating student housing and co-living spaces in Spain and France.

As the world's largest sovereign wealth fund, Norway's investment activities continue to shape the landscape of real estate in key global cities, with London being a focal point for its strategic financial endeavors.