Thursday March 28th, 2013 - 9:54AM
LONDON—IHG agreed to sell the InterContinental London Park Lane to Constellation Hotel (Opco) UK S.A., an affiliate of Constellation Hotels Holding Ltd., a Middle East private investment group.
IHG’s leasehold interest in the hotel has been sold for gross cash proceeds of £301.5 million ($457 million). This is 62% above December 31, 2012 net book value.
In addition, IHG secured a 30-year management contract on the hotel, with three, 10-year extension rights at IHG’s discretion, giving an expected contract length of 60 years. Management fees are expected to be approximately £4million ($6 million) per year.
The hotel opened in 1975 and has been wholly owned by IHG since 1999.
According to the company, the hotel generated revenues of $89 million in 2012.
The transaction is expected to close in second quarter, subject to the satisfaction of certain standard conditions.