Shaftesbury and Capital & Counties Properties are in preliminary talks to build a property portfolio with assets in some of London’s most sought-after areas including Covent Garden and Chinatown.
The two companies noted in a joint statement that the Norwegian Sovereign Wealth Fund, the main investor in the two companies, has indicated its support for a full-share deal, the terms of which are still being negotiated.
Shaftesbury will own 53% and Ian Hawkesworth, Capco’s chief executive, will continue to play the same role in the REIT, which could be worth around £3.6bn ($4.5bn) based on current market value.
The merger will include approximately 2.9 million square feet of potential rental space in the metropolitan West End, as well as approximately 1.8 million square feet of retail and hospitality space. According to the statement, the total stock of office and residential housing is about 1.1 million square feet.
The potential deal is that London is showing signs of recovery with an influx of tourists to the capital, local consumers visiting shops and restaurants and passengers returning to their offices.
Transaction volume reached 88% of pre-pandemic levels last week, according to Bloomberg’s Pret Index, which tracks sales of Pret a Manger stores in the nearby Financial District and Canary Wharf.
Notably, shares of both companies have declined over the past year, as Shaftesbury shares fell 10% and Capco shares fell 11%.
Evercore and Blackdown Partners advise Shaftesbury’s board of directors, while Rothschild & Co. advises Capco.
Sky News reported that the two companies were in talks earlier on Saturday.
Source: El Iktisad
