InterContinental Hotels Group (IHG) has sold the majority of its UK portfolio for £1bn.
The purchaser is a consortium made up of Lehman Brothers Real Estate Partners, GIC Real Estate and Realstar Asset Management.
The 73 hotels were put on the market in September 2004 as part of IHG’s continuing asset disposal programme.
They consist of four Crowne Plaza hotels, 68 Holiday Inn hotels and one Express by Holiday Inn hotel. They include a core portfolio of 63 hotels and a secondary portfolio of 10 hotels.
IHG will continue to manage the core portfolio of 63 hotels under 20-year management contracts with an annual fee of £12m pa for the first year.
Capital must be invested in the secondary portfolio of 10 hotels if the consortium wants to continue to use the IHG brand after 2007.
IHG finance director Richard Solomons said: “This is a significant step forward in the execution of our strategy and we have achieved attractive management contracts.
“These long-term contracts give us excellent continued representation for Holiday Inn in the UK, one of our most important markets globally, and illustrate our strength as one of the leading hotel management companies in the world.”
Realstar Group chairman Jonas Prince said: “This acquisition represents a significant opportunity for us as these properties offer tremendous value in terms of real estate and brand equity.
“We are excited to be working in tandem with our joint venture partners and IHG to ensure the continued integrity and viability of these properties.”
The announcement of the sale comes as IHG published its results for the 12 months to 31 December 2004. Group turnover was up by 2% to £2.2bn, with pretax profit increasing by 26.6% to £309m.
References: EGi News 10/03/05
