UK REIT Shaftesbury Capital has announced its partnership with Norges Bank Investment Management, the Norwegian sovereign wealth fund, for the sale of 25% non-controlling stake in its Covent Garden estate, with Shaftesbury retaining 75% ownership and management control.

Covent Garden is a mixed-use portfolio of assets in West London with 74% represented by retail and food and beverage and 26% represented by office and residential. The estate has high footfall, providing a ‘seven-days-a-week’ trading environment.

The portfolio has a net initial yield of 3.6%, annualised gross income of £104 million and an estimated rental value (ERV) of £134 million (as at 31^st December 2024). It covers some 220 buildings over 850 units, across 1.4 million square feet.

“We are pleased to announce the formation of a £2.7 billion long-term, strategic partnership with NBIM. This investment by a leading global real estate investor demonstrates the quality of our portfolio. This partnership brings together two long-term investors who have a shared confidence in and ambitions for the growth prospects of the Covent Garden estate and the West End,” comments Ian Hawksworth, Chief Executive of Shaftesbury.

“Through partnering with private capital, this transaction leverages our operating expertise and assets, enhancing growth and expansion opportunities across our portfolio while strengthening our financial position and providing significant optionality to the Group.”

The transaction values the estate at £2.7 billion in line with the REIT’s independent property valuation at the end of December 2024 with the Group expecting gross cash proceeds of approximately £570 million from NBIM.