Duke of Westminster sells £306m slice of Mayfair to Norway’s oil fund

The Duke of Westminster  has sold a £306m stake in London’s Mayfair to Norway, marking the biggest land deal in the area’s history.

Grosvenor, the Duke’s property company, has formed a joint company with Norges Bank Investment Management, Norway’s national oil fund. The Norwegian fund owns 25pc of the new joint venture, which holds a portfolio of 175 buildings worth around £1.2bn.

The sale is the largest that Grosvenor has made to outside investors. The Grosvenor family began developing Mayfair in 1720, creating a grid of streets from rural land.

Grosvenor will continue to manage the buildings, which are mainly shops and offices located around Mount Street and Grosvenor Street. The joint venture will own the leaseholds for the buildings, with Grosvenor keeping the freehold.

While Norges is a prolific investor in Britain , the deal is its biggest investment in London property since 2018. The fund owns a 25pc stake in Regent Street and 23.5pc of Shaftesbury Capital – which owns swathes of Covent Garden, Carnaby Street, Soho and Chinatown.

In November, Norges upped its ownership of the Pollen Estate in Mayfair to 68pc, which includes most of Savile Row. Beyond London, it took full ownership of the Meadowhall shopping centre in Sheffield for £360m in May last year.

Norges manages the country’s vast North Sea oil wealth, with total investments worth 20 trillion Norwegian kroner (£1.4 trillion).

The country has taken the fossil fuel revenue and invested it in a myriad of different assets, including UK property, amid warnings that Norway’s oil and gas revenues will come under pressure from a decline in supply .

The latest report from the Norwegian Offshore Directorate forecast that Norway’s oil and gas production could fall to as low as 110m cubic metres by 2035, down from a peak of around 230m last year.