Qatari-backed group buys luxury London hotel

LONDON (AFP) - InterContinental Hotels Group announced on Thursday they have agreed to sell their London Park Lane hotel to Qatari investors, adding to the Gulf state's growing portfolio of blue-chip property in Britain.

IHG said in a statement they had sold the 447-room property to Constellation Hotel UK, an affiliate of Constellation Hotels Holding, "a Middle Eastern private investment group" for £301.5 million (S$570 million) Constellation is a Luxembourg-based holding company with links to Qatar.

Park Lane is an exclusive street featuring many top hotels overlooking Hyde Park.

Qatar already had a strong presence in London, having 95-per cent financed The Shard, western Europe's tallest skyscraper, and it also owns the luxury department store Harrods.

IHG will continue to manage the hotel for 30 years, with three 10-year extensions at their discretion, giving an expected 60-year contract length.

The hotel was opened in 1975 and has been wholly owned by IHG since 1999.

It generated revenues of US$89 million (S$111.23 million) in 2012.

The transaction is expected to be completed in the second quarter of this year.

Since 2003, IHG has sold 191 hotels for proceeds of US$6.1 billion.

"It is another step in our long-standing commitment to reduce the capital intensity of IHG," said chief executive Richard Solomons.