Historic Land Deal Shakes Up London’s Mayfair
In a monumental transaction, the Duke of Westminster has sold a significant stake in London’s prestigious Mayfair district to Norway, marking the largest land deal in the area’s history. This strategic partnership between Grosvenor, the Duke’s property company, and Norges Bank Investment Management, Norway’s national oil fund, has created a joint venture worth approximately £1.2 billion.
A New Era for Mayfair
The Grosvenor family has been instrumental in shaping Mayfair since 1720, transforming rural land into a grid of streets. Today, the area is home to 175 buildings, primarily comprising shops and offices around Mount Street and Grosvenor Street. While Grosvenor will continue to manage these properties, the joint venture will hold the leaseholds, with Grosvenor retaining the freehold.
Norway’s Growing Presence in London
Norges Bank Investment Management, which owns 25% of the new joint venture, has been actively investing in British assets. This deal marks its largest investment in London property since 2018, adding to its existing portfolio, which includes stakes in Regent Street, Shaftesbury Capital, and the Pollen Estate in Mayfair. The fund’s total investments are valued at a staggering 20 trillion Norwegian kroner (£1.4 trillion).
Diversifying Investments
Norway’s decision to invest in UK property is a strategic move to diversify its assets, as the country’s oil and gas revenues are expected to decline in the coming years. The Norwegian Offshore Directorate forecasts that oil and gas production could drop to 110m cubic metres by 2035, down from a peak of around 230m last year. By investing in property, Norway is securing a stable source of revenue for the future.
Reinvesting in the Community
Grosvenor plans to reinvest the funds from the deal into lending and developments across its neighbourhoods, including Belgravia. The company has several projects in the pipeline, such as the £500m redevelopment of South Molton Street and a revamp of Grosvenor Square. James Raynor, CEO of Grosvenor Property, expressed his confidence in the future of the West End and London, stating that this partnership will drive the area’s competitiveness and appeal as a global economic, cultural, and retail centre.
A Shared Vision
Jayesh Patel, head of UK real estate at Norges Bank Investment Management, echoed Raynor’s sentiments, emphasizing the long-term value creation potential in the West End. This historic deal marks a new chapter in the development of Mayfair, with both parties committed to driving growth and prosperity in the area.
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