Norges-Crown Estate JV expands into Mayfair in €478m deal

Norway’s giant oil pension fund and The Crown Estate have expanded their joint London property holdings by acquiring a chunk of prime Mayfair real estate in a £381 mln (€478 mln) transaction.

Norges Bank Investment Management (NBIM), acting for Norway’s €617 bn Government Pension Fund Global, and the British monarch’s real estate vehicle have acquired the Church Commissioners for England's 64% holding in the Pollen Estate. NBIM purchased a 57.8% stake while The Crown Estate took a 6.4% interest in the estate.

The Pollen Estate's origins date back to 1622 when William Maddox bought the freehold of 14 hectares of undeveloped ground for £1,450. The land was subsequently developed in the 17th and 18th centuries and formed a substantial part of Mayfair. The estate came into the hands of the Pollen Family and has been handed down via inheritance and bequests over the years. It now consists of office space, residential units and retail outlets, which are mostly situated on Savile Row.

NBIM and The Crown Estate launched their London partnership in 2010 with the Norwegian fund acquiring a 25% stake in The Crown Estate's Regent Street holdings for £448 mln (then about €511 mln). Other smaller joint purchases followed. The Regent Street portfolio borders the Pollen Estate holdings.

Strong interest
The sale of the Church Commissioners for England’s holding in the Pollen Estate is the largest single property sale undertaken by the Commissioners. The initial brochure went to over 990 parties, which was followed by over 100 presentations and tours of the estate to 86 interested parties, including banks, pension funds, charitable foundations, institutions, sovereign wealth funds, private family offices and REITS.

David Shaw, head of the Regent Street portfolio of The Crown Estate, said: 'With the benefit of our partnership holdings in Regent Street, we recognised the long-term investment opportunity of the Pollen Estate holdings, particularly in their core streets of Savile Row and Cork Street.

'Together with NBIM, we look forward to working with the Pollen Estate board and other Pollen beneficiaries to build on the success to date. Savile Row and Cork Street have international reputations for their focus on tailoring and art galleries respectively and the success of these two streets is crucial to the ongoing success of London’s West End as an international destination.'

Joseph Cannon, chief surveyor of the Church Commissioners for England, said: 'As we expected, the depth and calibre of international interest in the estate was impressive, with a range of buyers showing a strong interest in the Commissioners’ majority holding.'

The Church Commissioners are an endowment charity committed to supporting the ministry of the Church of England, particularly in areas of need and opportunity.