InterContinental sells another marquee property: London Park Lane for £400m
Exterior of the Park Lane Hotel in London. UggBoy♥UggGirl / Flickr
Management fees are quite wonderful, but this current industry trend of focusing on it and shedding real estate — including prime properties in major cities — may end in regret.
One of London’s most prestigious hotels was today bought by the Qataris for more than £400 million.
The five-star, 13-storey InterContinental London Park Lane was only officially put on the market last month, but after attracting interest “from a number of investors” has been sold for £301.5 million to Constellation Hotels, which is ultimately owned by the Qatari sovereign wealth fund.
The Qataris are also understood to have bought the freehold for around £100 million from the Crown Estate.
InterContinental Hotel Group (IHG), which has transformed itself from a hotel owner to a hotel manager over the last decade, will continue to run the Park Lane hotel for the next 30 years with a further three, 10-year extension options.
The sale price was much higher than most analysts had expected, with most forecasting around £250 million.
Richard Solomons, chief executive of IHG, said: “When you talk about selling a trophy asset like Park Lane people pick up the phone quite quickly. It’s a good price for both parties for a 57-year leasehold. It also highlights both the value of assets on our balance sheet and also the value of InterContinental as one of the world’s leading luxury hotel brands.”
Constellation recently bought four luxury hotels in France including Hotel Concorde La Fayette, near the Eiffel Tower.
The Qataris also bought the W Hotel in London’s Leicester Square just over a year ago. In addition, they have announced plans to take the Harrods brand into hotels.