Wrap Text
Shaftesbury Capital PLC and Norges Bank Investment Management establish Covent Garden partnership
SHAFTESBURY CAPITAL PLC
(Incorporated and registered in the United Kingdom
with Registra on Number 07145051 and
registered in South Africa as an external company
with Registra on Number 2010/003387/10)
JSE code: SHC ISIN: GB00B62G9D36
LEI: 549300TTXXZ1SHUI0D54
("Sha esbury Capital" or "the Company")
SHAFTESBURY CAPITAL PLC AND NORGES BANK INVESTMENT MANAGEMENT ESTABLISH COVENT GARDEN PARTNERSHIP
FOR IMMEDIATE RELEASE
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
Further to the announcement dated 19 March 2025, Shaftesbury Capital PLC ("Shaftesbury Capital" or the "Group") is
pleased to announce that it has formed a strategic, long-term partnership (the "Partnership") with Norges Bank
Investment Management ("NBIM"), the Norwegian sovereign wealth fund, in respect of its Covent Garden estate.
Shaftesbury Capital has exchanged contracts for the sale of a 25 per cent non-controlling interest in the Covent Garden
estate to NBIM (the "Transaction") with Shaftesbury Capital retaining 75 per cent ownership and management control
over the estate. The Transac on values the Covent Garden estate at £2.7 billion, in line with its independent property
valua on as at 31 December 2024 (adjusted for a small asset acquisi on post year-end), with expected gross cash
proceeds of approximately £570 million. Comple on of the Transac on is expected to take place in early April 2025.
Covent Garden is a world-class global des na on in the heart of the West End of London, centred around the iconic
Piazza, the Market Building and surrounding streets, together with Seven Dials. It is a mixed-use por olio of assets, with
74 per cent of the property value represented by retail and food & beverage and 26 per cent by office and residen al.
The estate is a vibrant, high-foo all des na on, which provides a seven-days-a-week trading environment and exposure
to a diverse customer base which has proven to be resilient throughout economic cycles.
The portfolio has a net ini al yield of 3.6 per cent, annualised gross income of £104 million and an es mated rental value
(ERV) of £134 million as at 31 December 2024. The por olio covers some 220 buildings and over 850 units, across 1.4
million square feet (excluding 0.1 million square feet of long-leasehold residen al interests).
Benefits of the transaction
The Board of Shaftesbury Capital (the "Board") believes that the Transac on will provide a number of strategic and
financial benefits, including:
- Crea on of a strategic partnership with a leading global investor with a long-term investment horizon and
knowledge of and established presence in London's West End;
- Positons the business for enhanced investment and expansion opportunities both within the Partnership and
the broader Group, adding to its growth prospects;
- Substantial cash investment by NBIM, valuing the Covent Garden estate at £2.7 billion, in line with the
independent property valuation undertaken by CBRE as at 31 December 2024;
- The Transaction is expected to be earnings-enhancing and neutral to 2024 EPRA net tangible assets per share.
Shaftesbury Capital will retain control and management of the Covent Garden estate, with fee income from
the Partnership reflecting the running costs of managing the estate; and
- Strengthened balance sheet and enhanced financial flexibility across the Group, with a range of options to
deploy the proceeds, including acquisitions, investment into the existing Shaftesbury Capital portfolio and
reduction of net debt.
Ian Hawksworth, Chief Executive of Shaftesbury Capital, said:
"We are pleased to announce the forma on 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.
Through partnering with private capital, this transaction leverages our operating experiense and assets, enhancing growth
and expansion opportunities across our portfolio whilst strengthening our financial position and providing significant
optionality to the Group.
As demonstrated by our recent 2024 results, Shaftesbury Capital's portf olio is an cipated to deliver long-term sustained
income and value growth. Backed by a strong balance sheet, we are well-posi oned to capitalise on market opportuni es
in London's West End."
Jayesh Patel, Head of UK Real Estate at NBIM, said:
"We are delighted to announce our investment into the Covent Garden estate, creating a long-term partnership with
Shaftesbury Capital. This investment underscores our belief in the strength of London with the portfolio complemen ng
our other high quality West End investments. Covent Garden is one of the world's most recognised retail, leisure and
cultural des na ons and we look forward to supporting Shaftesbury Capital's management team, with their strong track
record of delivering the growth potential of this prime West End estate."
Background to the transaction
The Transaction highlights the value of our prime central London estates with aggregated ownership, and characterised
by strength of demand, high occupancy, low capital requirements and reliable growing long-term cash flows.
Shaftesbury Capital has assembled the Covent Garden estate, now comprising some 220 buildings over many years, and
implemented a comprehensive leasing strategy and a creative approach to asset management alongside strategic
consumer marketing, selective refurbishment and development, and enhancement of the public realm. This unique
portfolio in the heart of London's West End represents one of the world's most desirable real estate loca ons.
Use of proceeds
The Transaction provides increased financial flexibility, with a range of op ons to deploy the proceeds to enhance long-
term returns for shareholders, including:
- Acquisi on opportuni es in both Covent Garden and across the wider Group, with a number of buildings
currently under review;
- Investment into the exis ng Sha esbury Capital por olio including refurbishment, asset management and
reposi oning opportuni es, to realise the long-term poten al of our assets; and
- Repayment of outstanding debt, whilst maintaining access to significant liquidity.
Sha esbury Capital has a strong balance sheet and maintains an ac ve and disciplined approach to capital alloca on.
Proceeds will be used ini ally to reduce drawn debt, in par cular par al repayment of the Canada Life term loan (£67.4
million of the £135 million, which will u lise approximately £42 million of the proceeds net of restricted cash), and in
due course repayment of the £275 million of exchangeable bonds due in March 2026. In the mean me, cash will be held
on deposit un l deployed.
Financial e?ects of the Transac on
Sha esbury Capital is expected to receive gross cash proceeds of approximately £570 million from NBIM, represen ng
25 per cent of the es mated net asset value of the Covent Garden group of approximately £2.3 billion (as at 31 December
2024). The exis ng Covent Garden debt of £380 million, comprising unsecured private placement loan notes, will remain
within the Covent Garden group following comple on of the Transac on. Covent Garden is expected to have an ini al
cash balance of approximately £25 million on comple on.
The Transac on is expected to be neutral to 31 December 2024 EPRA NTA per share for Sha esbury Capital.
The Transac on is an cipated to be earnings enhancing for Sha esbury Capital, re?ec ng adjustments to Group share
of net rental income, asset management fee income and costs to be borne directly by the Partnership (totalling
approximately £4.5 million ini ally at Group share on an annualised basis), and the reduc on in finance costs resul ng
from lower net debt. It is expected that there will be the opportunity to enhance earnings further over me as the
proceeds are reinvested.
Following the Transac on, and before deployment of proceeds, the Group EPRA loan to value ra o will be 16 per cent
on a pro forma, propor onally consolidated basis, compared with 27 per cent at the end of 2024. This is based on
Sha esbury Capital's debt and cash balances as at 31 December 2024, adjusted for the net Transac on proceeds, and
the independent property valua on of the Sha esbury Capital por olio as at 31 December 2024. Net debt to EBITDA is
es mated to reduce from approximately 11 to seven mes. On comple on, Sha esbury Capital will have access to £1.1
billion of liquidity, including £450 million of commi ed undrawn facili es.
Sha esbury Capital will con nue to consolidate fully the Covent Garden estate into its Group financial statements. A
non-controlling interest will be recognised by Sha esbury Capital re?ec ng NBIM's 25 per cent interest in Covent Garden.
The illustra ve impact of the Transac on on the Group, based on reported 2024 results, would be to reduce the Group's
share of property at market value to £4.4 billion (compared with £5.0 billion on a Group share basis at year end), a
reduc on in net debt from £1.4 billion to £0.7 billion and the net asset value of the Group being unchanged at £3.7
billion.
31 Dec Pro-forma1
Key financial metrics 2024
Property por olio £5.0bn £4.4bn
Net debt £1.4bn £0.7bn
Net asset value (NTA or net tangible assets) £3.7bn £3.7bn
EPRA NTA per share (pence) 200p 200p
EPRA LTV 27% 16%
Net debt to EBITDA 11x 7x
Liquidity £0.6bn £1.1bn
1. Pro forma Dec 2024 re?ects propor onate consolida on of 75% of Covent Garden and 50% of Lillie Square
Addi onal informa on
As a result of its exis ng shareholding in Sha esbury Capital, NBIM is defined as a related party to Sha esbury Capital
under the UK Lis ng Rules ("UKLR") and, as a result, the Transac on cons tutes a related party transac on under UKLR
8R.
The Board confirms its view that the Transac on is fair and reasonable as far as the shareholders of Sha esbury Capital
are concerned and that the Board has been so advised by Rothschild & Co in its role as Sha esbury Capital's sponsor
and financial adviser in connec on with the Transac on.
Enquiries:
Sha esbury Capital PLC +44 (0)20 3214 9150
Ian Hawksworth Chief Execu ve
Situl Jobanputra Chief Financial O?cer
Sarah Corbe Director of Commercial Finance and Investor Rela ons
Rothschild & Co (Financial adviser and sponsor to Sha esbury Capital) +44 (0)20 7280 5000
Alex Midgen
Peter Everest
Jake Shackleford
Media enquiries:
UK: Hudson Sandler Michael Sandler +44 (0)20 7796 4133
UK: RMS Partners Simon Courtenay +44 (0)20 3735 6551
SA: Ins nc f Louise Fortuin +27 (0)11 447 3030
A live audio call and webcast on the Transac on to analysts and investors will take place today at 08:30am (UK me)
at h ps://stream.brrmedia.co.uk/broadcast/67d4476d19d2d898348937eb
It will be available on the Group's website at www.sha esburycapital.com
Rothschild & Co is ac ng as financial adviser and sponsor in rela on to the Transac on. Herbert Smith Freehills is ac ng
as legal adviser to Sha esbury Capital in rela on to the Transac on.
About Sha esbury Capital
Sha esbury Capital PLC ("Sha esbury Capital") is the leading central London mixed-use REIT and is a cons tuent of the
FTSE-250 Index. Our property assets under management, valued at £5.0 billion, extend to 2.7 million square feet of
le able space across the most vibrant areas of London's West End. With a diverse mix of shops, restaurants, cafés, bars,
residen al apartments and o?ces, our des na ons include the high foo all, thriving neighbourhoods of Covent Garden,
Carnaby, Soho and Chinatown. Our proper es are close to the main West End Underground sta ons and transport hubs
for the Elizabeth Line. Sha esbury Capital shares are listed on the London Stock Exchange ("LSE") (primary) and the
Johannesburg Stock Exchange ("JSE") (secondary) and the A2X (secondary).
Our purpose
Inves ng to create thriving des na ons in London's West End where people enjoy visi ng, working, and living.
Our values
We have a set of values that are fundamental to our behaviour, decision making and the delivery both of our purpose
and strategy: Act with integrity; Take a crea ve approach; Listen and collaborate; Take a responsible, long-term view;
and Make a di?erence.
Principal terms of the Transac on
Sha esbury Capital and NBIM entered into a sale and purchase agreement on 20 March 2025. Pursuant to this, NBIM
will pay cash considera on of approximately £570 million to Sha esbury Capital for the acquisi on of 25 per cent of the
shares in the holding company for the Covent Garden estate, ("CG TopCo"), currently a wholly-owned subsidiary of
Sha esbury Capital and the owner of the en rety of the Covent Garden proper es (following comple on of an internal
reorganisa on). As part of the Transac on, Covent Garden will elect for REIT status.
The final considera on payable is subject to adjustment under a customary comple on accounts mechanism.
Prior to comple on of the Transac on, Sha esbury Capital will complete an internal reorganisa on to transfer all Covent
Garden proper es into the ownership of CG TopCo.
On comple on of the Transac on, Sha esbury Capital and NBIM will enter into an agreed form shareholders' agreement,
pursuant to which Shaftesbury Capital will retain day-to-day control over the Covent Garden estate, subject to a limited
number of customary reserved matters for NBIM, in keeping with its non-controlling minority shareholding.
The shareholders' agreement contains customary transfer restric ons, including minimum shareholdings, pre-emp on
rights and drag along and tag along rights for both shareholders.
Sha esbury Capital and NBIM are each subject to a three-year lock-up period, subject to certain excep ons including in
the case of a takeover of Sha esbury Capital.
Management arrangements
Sha esbury Capital will provide day-to-day asset management and property management services to the Partnership
through an asset management agreement.
Asset management fees will be paid by the Partnership to Sha esbury Capital, re?ec ng the running costs of managing
the estate.
Important no ces
This Announcement is for informa on purposes only and is not intended to and does not cons tute, or form part of, any
o?er to sell or issue, or any solicita on or recommenda on of an o?er to purchase, subscribe for or otherwise acquire,
or the solicita on of any o?er to dispose of, any securi es in Sha esbury Capital. Nothing contained in this
Announcement is intended to, nor shall it, form the basis of, or be relied on in connec on with, any contract or
commitment whatsoever and, in par cular, must not be used in making any investment decision.
The distribu on of this Announcement in or from certain jurisdic ons may be restricted or prohibited by the laws of any
jurisdic on other than the UK. Recipients of this Announcement are required to inform themselves of, and comply with,
all restric ons or prohibi ons in such other jurisdic ons. Any failure to comply with applicable requirements may
cons tute a viola on of the laws and/or regula ons of such other jurisdic ons.
This Announcement has been prepared for the purpose of complying with English law and the applicable laws and
regula ons of the UK (including the UK Lis ng Rules and the Disclosure Guidance and Transparency Rules) and the
informa on disclosed may not be the same as that which would have been disclosed if this Announcement had been
prepared in accordance with the laws and regula ons of jurisdic ons outside the United Kingdom.
This Announcement contains inside informa on for the purposes of Ar cle 7 of the Market Abuse Regula on in respect
of Sha esbury Capital. The person responsible for arranging for the release of this Announcement on behalf of
Sha esbury Capital is Ruth Pavey, Company Secretary.
Important no ces regarding the Financial Adviser
N. M. Rothschild and Sons Limited ("Rothschild & Co"), which is authorised and regulated by the FCA in the United
Kingdom, is ac ng exclusively for Sha esbury Capital and no one else in connec on with the Transac on and will not be
responsible to any other person for providing the protec ons a?orded to its clients or for providing advice in connec on
with the Transac on, the contents of this Announcement or any other ma er referred to herein.
Apart from the responsibili es and liabili es, if any, which may be imposed on Rothschild & Co. by the FSMA or the
regulatory regime established thereunder, or under the regulatory regime of any jurisdic on where the exclusion of
liability under the relevant regulatory regime would be illegal, void or unenforceable, neither Rothschild & Co nor any
of its a?liates (nor their respec ve directors, o?cers, employees or agents) owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any
person who is not a client of Rothschild & Co in connec on with this Announcement, any statement contained herein,
the Transac on or otherwise. Rothschild & Co. accepts no responsibility whatsoever for, or makes any representa on or
warranty, express or implied, as to the contents of this Announcement, including its accuracy, completeness or
verifica on or for any other statement made or purported to be made by it, or on its behalf, and nothing contained in
this document is, or shall be, relied on as a promise or representa on in this respect, whether as to the past or the future,
in connec on with Sha esbury Capital or the Transac on. Rothschild & Co. and its respec ve subsidiaries, branches and
a?liates accordingly disclaim, to the fullest extent permi ed by law, all and any duty, liability and responsibility whether
arising in tort, contract or otherwise (save as referred to above) in respect of this Announcement or any such statement
or otherwise.
Cau onary note regarding forward-looking statements
This Announcement (including informa on incorporated by reference in this Announcement), oral statements made
regarding the Transac on and other informa on published by Sha esbury Capital may contain statements which are, or
may be deemed to be, "forward-looking statements". These forward-looking statements can be iden fied by the fact
that they do not relate only to historical or current facts. Forward-looking statements are prospec ve in nature and are
not based on historical facts, but rather on current expecta ons and projec ons of the management of Sha esbury
Capital about future events, and are therefore subject to risks and uncertain es which could cause actual results to di?er
materially from the future results expressed or implied by the forward-looking statements. The forward-looking
statements contained in this Announcement may include statements rela ng to the expected e?ects of the Transac on
on Sha esbury Capital, the expected ming of the Transac on and other statements other than historical facts. O en,
but not always, forward-looking statements can be iden fied by the use of forward-looking words such as "plans",
"expects" or "does not expect", "is expected", "is subject to", "budget", "scheduled", "es mates", "targets", "hopes",
"forecasts", "intends", "an cipates" or "does not an cipate", or "believes", or varia ons of such words and phrases of
similar meaning or statements that certain ac ons, events or results "may", "could", "should", "would", "might" or "will"
be taken, occur or be achieved. These statements are based on assump ons and assessments made by Sha esbury
Capital in light of its experience and its percep on of historical trends, current condi ons, future developments and
other factors they believe appropriate. Although Sha esbury Capital believe that the expecta ons re?ected in such
forward-looking statements are reasonable, Sha esbury Capital can give no assurance that such expecta ons will prove
to be correct. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of factors which could cause actual results
and developments to di?er materially from those expressed or implied by such forward looking statements, including,
among others the enactment of legisla on or regula on that may impose costs or restrict ac vi es; the re-nego a on
of contracts or licences; ?uctua ons in demand and pricing in the commercial property industry; changes in government
policy and taxa ons; changes in poli cal condi ons, economies and markets in which Sha esbury Capital operates;
changes in the markets from which Sha esbury Capital raises finance; the impact of legal or other proceedings; changes
in accoun ng prac ces and interpreta on of accoun ng standards under IFRS; changes in interest and exchange rates;
industrial disputes; war and terrorism. These forward-looking statements speak only as at the date of this document.
Other unknown or unpredictable factors could cause actual results to di?er materially from those in the forward-looking
statements. Such forward-looking statements should therefore be construed in the light of such factors.
Neither Sha esbury Capital, nor any of their respec ve associates or directors, o?cers or advisers, provides any
representa on, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking
statements in this Announcement will actually occur. You are cau oned not to place undue reliance on these forward-
looking statements.
Other than in accordance with their legal or regulatory obliga ons (including under the UK Lis ng Rules and the
Disclosure Guidance and Transparency Rules of the FCA), Sha esbury Capital is not under any obliga on, and
Sha esbury Capital expressly disclaim any inten on or obliga on, to update or revise any forward-looking statements,
whether as a result of new informa on, future events or otherwise.
Pro forma
The unaudited pro forma metrics have been prepared for illustra ve purposes only, to illustrate the impact of the
Transac on, as if it had been undertaken as at 31 December 2024. Because of its nature, the pro forma financial
informa on addresses a hypothe cal situa on and, therefore, does not represent the actual financial posi on or results
of the Group. Future results of the Group may di?er materially from those presented in the unaudited pro forma balance
sheet due to various factors.
No Profit Forecasts or Es mates
No statement in this Announcement is intended as a profit forecast or es mate for any period and no statement in this
Announcement should be interpreted to mean that earnings or earnings per share or dividend per share for Sha esbury
Capital, for the current or future financial years would necessarily match or exceed the historical published earnings or
earnings per share or dividend per share for Sha esbury Capital.
20 March 2025
Sponsor
Java Capital
Date: 20-03-2025 09:00:00
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