In a bold vote of confidence in London’s luxury real estate market, Norway’s sovereign wealth fund, valued at an astonishing $1.8 trillion, has struck a major deal to acquire a 25% stake in Covent Garden’s premium property portfolio, according to an announcement made Thursday. The fund, managed by Norges Bank Investment Management (NBIM), will invest £570 million (approximately $740 million) in a joint venture with Shaftesbury Capital, one of Britain’s leading real estate companies.

This latest transaction underscores the Norwegian fund’s long-term strategy of diversifying its assets by investing in high-quality, income-generating properties in major global cities.

Inside the Deal: A Quarter Stake in Covent Garden’s Iconic Portfolio

The joint venture gives NBIM a 25% share of Shaftesbury Capital’s prestigious Covent Garden property portfolio, which has been valued at £2.7 billion ($3.5 billion) in total. The portfolio covers an impressive 1.5 million square feet, predominantly occupied by retail, leisure, and hospitality spaces, situated in two of London’s most vibrant districts: Covent Garden and Seven Dials.

This area is not only a tourist magnet but also a prime destination for high-end retailers, restaurants, and cultural attractions, making it a highly sought-after asset for institutional investors seeking stable, long-term returns.

Market Response: Shaftesbury Capital Shares Surge

News of the deal sent Shaftesbury Capital’s London-listed shares soaring by nearly 16% at market open, before settling at a gain of 8.9% by mid-morning. Investors clearly see this partnership with NBIM as a strong endorsement of the portfolio’s potential and the resilience of London’s commercial real estate sector, even in the face of broader economic uncertainty.

Why London? NBIM’s Strategic Bet on the U.K. Capital

“This investment underscores our belief in the long-term strength and resilience of London as a global city,” said Jayesh Patel, NBIM’s Head of U.K. Real Estate, in an official statement. “The Covent Garden portfolio complements our existing high-quality assets in London’s West End and reinforces our commitment to prime real estate in world-class cities.”

This is not NBIM’s first foray into London property this year. In January 2025, the fund invested £306 million for a 25% stake in the prestigious Grosvenor Estate, owned by the Duke of Westminster. That deal, valued at £1.2 billion, marked the largest sale to an external investor in the history of Grosvenor’s exclusive Mayfair estate.

With the Covent Garden deal, NBIM’s total investment in London real estate this year alone now stands at £876 million ($1.13 billion).

Beyond the U.K.: NBIM Expands into European Housing Markets

NBIM’s appetite for prime real estate isn’t limited to London. On the same day as the Covent Garden announcement, the fund revealed another major transaction in continental Europe. It has agreed to pay €240 million ($260 million) for a 40% stake in AXA IM Alts’ Lifestyle Housing platform, which focuses on student housing and co-living properties across Spain and France.

This move marks NBIM’s strategic push into alternative residential sectors, where demand for flexible living spaces is on the rise, particularly in key European urban centers.

About Norway’s Sovereign Wealth Fund

Managed by Norges Bank Investment Management, Norway’s sovereign wealth fund is officially known as the Government Pension Fund Global (GPFG). With assets exceeding $1.8 trillion, it is the largest sovereign wealth fund in the world, holding stakes in over 9,000 companies globally and owning 1.5% of all listed equities worldwide.

The fund’s real estate portfolio spans prime office, retail, and logistics properties in major cities like New York, Paris, London, and Tokyo. Its investment strategy focuses on long-term value, sustainability, and stable returns for future generations of Norwegians.

What This Means for London’s Property Market

NBIM’s renewed commitment to London real estate comes at a time when global investors are re-evaluating their portfolios in light of economic uncertainty, rising interest rates, and geopolitical risks. This landmark deal signals renewed confidence in the U.K. capital’s long-term prospects, particularly in core West End locations, which continue to attract international brands and high foot traffic.

Despite Brexit and economic headwinds, London remains a top destination for institutional investors, and NBIM’s £570 million investment in Covent Garden is a testament to the city’s enduring appeal.

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