Rugby plans to transfer all of its property stock in Covent Garden into the partnership at the current market value of £63 million ($89 million). Rugby will then inject £5 million ($7 million) of equity into the fund and funds managed by BH&S £20 million ($28 million). The Royal Bank of Scotland has agreed to provide £42 million ($59 million) of debt finance.

The partners aim ultimately to grow the fund to £250 million ($353 million) by bringing in other investors who will either subscribe for equity or inject properties of their own in the Covent Garden area..

Rugby's chairman David Tye said: 'There is still much for us to achieve in Covent Garden – the prospects for long term growth are excellent, and we view the Covent Garden portfolio, which we have built up over the past few years, as the first in a number of central London estates which could be established by Rugby to form a nucleus for future collective investment vehicles.'