IHG set to sell Paris hotel for €330m
InterContinental Hotels Group is in negotiations with Constellation Hotels over the sale of its Paris Le Grand hotel.
Constellation, which is ultimately controlled by Qatar’s sovereign wealth fund, has agreed to pay €330 million in cash for the hotel as well as a further €60 million set aside for future hotel renovations.
IHG will retain a 30-year management contract on the hotel with the right to a possible 10-year extension. The company expects to accrue €4 million in management fees per annum.
The move is part of IHG’s plans to sell off some of its hotels in order to free up capital.
The hotel, which is located in the heart of Paris overlooking the Opera House, has 470 guest rooms, including 70 suites. It first opened in 1862 and has operated under the InterContinental brand since 1982. In 2013, it generated revenues of $118 million.
A deal for IHG’s London Park Lane hotel was announced last year with an affiliate of Constellation agreeing to pay £302 million.
Richard Solomons, chief executive of IHG said: “The InterContinental Paris - Le Grand is an exceptional property and is an iconic hotel in our portfolio.
“This announcement demonstrates the continued successful implementation of our asset-light strategy and the strength of our relationship with Constellation, following its recent purchase of InterContinental London Park Lane and its majority investment in InterContinental New York Barclay.
“This potential transaction is yet another example of the enduring appeal of InterContinental as one of the world’s leading luxury hotel brands.”