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March 20 (Reuters) - Shares in Shaftesbury Capital opened up over 17% on Thursday after a deal with Norway's sovereign wealth fund, which analyst said signalled confidence in the London property market.
Norges Bank Investment Management (NBIM) bought 25% of Covent Garden estate, which comprises much of London's West End theatre and entertainment district, for 570 million pounds ($739 million) in a joint venture with the British real estate investment trust.
Shaftesbury shares rose 10% by 0838 GMT, helping make the broader European index of real estate stocks the leading gainer in the region, up around 1%.
Panmure Liberum analyst said the move was also a positive step to de-leveraging the UK firm's balance sheet, bringing down net debt to 7 times core profits from 11 times.
In January, NBIM bought a 2.3 million square feet portfolio around Grosvenor Street and Mount Street for 305.7 million pounds.
The FTSE 250 midcap index in London, where Shaftesbury is listed, was up 0.5%. ($1 = 0.7709 pounds) (Reporting by Danilo Masoni; Editing by Amanda Cooper)
