LONDON • Raffles Hotels & Resorts is the preferred operator of a hotel in London's Old War Office, once occupied by Winston Churchill, according to two people familiar with the plans.

The building in Whitehall, which is being redeveloped by the Hinduja Group and Spain's Obrascon Huarte Lain (OHL), will become the first Raffles hotel in London if the agreement is signed, said the people, asking not to be identified because the plans are private.

The Raffles brand was bought by Accor, Europe's largest hotel operator, earlier this year.

A spokesman for OHL said no final decision on the operator of the hotel has yet been taken, while officials at Accor and the Hinduja Group declined to comment.

Accor paid about US$2.9 billion (S$3.8 billion) in shares and cash in December to buy FRHI Holdings, the owner of the upscale Fairmont, Raffles and Swissotel brands, to boost its luxury hotel business.

The expansion puts the company in a better position to compete with global peers, including Marriott International, Starwood Hotels & Resorts Worldwide and Hyatt Hotels Corp, Bloomberg Intelligence analysts including Margaret Huang wrote in a June 15 note.

Hinduja and OHL bought the Old War Office, less than 1.6km from Buckingham Palace, from the United Kingdom's Ministry of Defence for £350 million (S$612.7 million).

The venture plans to turn the 54,000 sq m property into a hotel and 50 apartments, according to OHL's website.

BLOOMBERG