West End landlords Shaftesbury and Capco agree £5bn merger

Two of the West End’s biggest landlords have agreed to merge, creating a £5bn estate spanning some of London’s best known tourist destinations.

Capital & Counties, owner of Covent Garden, and Shaftesbury, which has a portfolio spanning parts of Soho, Chinatown and Carnaby Street, announced the all-share merger on Thursday morning.

Under the terms of the deal, existing shareholders in Shaftesbury will own 53 per cent of the newly formed group, and Capco shareholders 47 per cent. Ian Hawksworth, currently Capco chief executive, will become head of the combined group, which will be called Shaftesbury Capital.

Brian Bickell, who has led Shaftesbury for more than a decade, will retire on completion of the merger.

The deal brings to an end a courtship which predates the pandemic, with both companies long talking up the merits of a tie-up which will give the combined group control over one of the capital’s most popular retail and leisure destinations.

Hawksworth said the new management team would look to invest in the West End’s public realm and would focus on continuity rather than change.

He described his role as “about doing lots and lots of little things really. This is about creating vibrant areas and lots of choice for consumers, [playing a] long term custodial role for this estate.”

The recovery of the area, since Covid-19 forced tenants to shut up shop for long stretches of 2020 and 2021, has given the management of both teams more confidence to pursue the deal, he added.

Norges Bank, the Norwegian state fund, is the largest shareholder in both Capco and Shaftesbury, and has long been supportive of a merger, according to the companies.

Over the next two years, Shaftesbury Capital expects to slash £12mn from its annual costs as a result of the tie-up.