InterContinental Hotels Group (IHG) has sold its London Park Lane establishment for £301.5m. The deal for the leasehold of the property sees the hotel purchased by Constellation Hotel (Opco) UK, which is an affiliate of Constellation Hotels Holdings Limited, a Middle Eastern private investment group, with IHG gaining a management contract for the hotel.
As reported by IHG, the group has secured a 30-year management deal, with three ten-year extension rights at IHG’s discretion, giving an expected contract length of 60 years. Management fees are expected to be approximately £4m per annum.
The transaction is expected to be completed in the second quarter of 2013, subject to the satisfaction of certain standard conditions.The
proceeds will be used for general corporate purposes, with £61m used to provide security over UK pension liabilities that were previously secured against the hotel.
Richard Solomons, chief executive of IHG, commented, “The transaction we have announced today to sell InterContinental London Park Lane highlights the value of our asset portfolio and the attractiveness of InterContinental as one of the world’s leading luxury hotel brands. It is another step in our long-standing commitment to reduce the capital intensity of IHG. We are very pleased to be working closely with Constellation Hotels, a respected hotel investor, who will be a great partner and with whom we look forward to building a long- term relationship.”
