MidEast investors buy top London hotel for $457m

A Middle East private investment group has agreed to buy a luxury London hotel from InterContinental Hotels Group (IHG) for $457m.

IHG said in a statement that it has agreed to sell the InterContinental London Park Lane to Constellation Hotel (Opco) UK, which is an affiliate of Middle East-based Constellation Hotels Holding Limited.

IHG said its leasehold interest in the hotel has been sold for gross cash proceeds of £301.5m ($457m), 62 percent above the net book value as of end of 2012.

IHG added that it has secured a 30-year management contract on the hotel, with three ten-year extension rights at IHG’s discretion. Management fees are expected to be about $6m per annum.