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IHG Sells the Iconic London InterContinental

Last week IHG announced the sale of the company’s leasehold interest in one of the most famous hotels in London – the 447-guestroom InterContinental London Park Lane. The sum of the deal estimated US$454 million.

Commenting the agreement, IHG told that they were very satisfied with the deal because the hotel was sold 62% above its net book value on December 31, 2012. Together with the deal the hotelier secured a 30-year management contract with the private group from the Middle East. The contract prolongs IHG’s managing rights for next 60 years. The cost of managing fees will be approximately US$6 million a year. According to IHG CEO Richard Solomons, the sale of this hotel underlines the real value of the InterContinental brand and proves it to be one of the leading hotel brands in the luxury segment. The main reason for the sale, as Solomons mentioned, was to reduce the capital intensity. The transaction is to be completed in the second quarter of 2013.

InterContinental London Park Lane is located in a picturesque part of the UK capital – between Green Park and Hyde Park. Just like many popular properties in Europe and North America, the hotel was purchased by the company from the Middle East. As the press suggests, there were as many as six bidders for the project, the majority of which were companies and private investors from Asia and the Middle East.

05.04.2013

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