InterContinental Hotels Group PLC is to announce the sale of seven hotels in continental Europe to Morgan Stanley Real Estate Fund for about £400 million ($740 mn), according to The Times. The newspaper did not name its source, but said IHG is understood to have appointed agents to find a buyer for the Crowne Plaza hotel at Blackfriars, in the City of London, in which it has a minority stake, for more than 70 mln stg.
The best-known of the seven InterContinental-branded hotels that Morgan Stanley is acquiring is the Carlton in Cannes, on the French Riviera. The others are in Amsterdam, Budapest, Rome, Frankfurt, Madrid and Vienna, the newspaper said.
As part of the deal, IHG will retain a long-term management contract to continue running the properties. Morgan Stanley has also agreed to reflag a hotel that it owns in Australia as an InterContinental, with IHG taking over the management. Similarly, a hotel it owns in Japan may become a Crowne Plaza.
The Crowne Plaza at Blackfriars, which has 203 rooms, will be sold via the same sale and manage-back process. IHG owns 33 pct of the hotel, with two Middle Eastern investors owning the balance. Jones Lang LaSalle Hotels is the agent in the sale.
The disposal of the eight hotels will take total proceeds raised by IHG since its demerger from Six Continents three years ago to more than 2.8 bln stg. It has returned, or committed to return, most of the cash to shareholders, although some of the latest proceeds could be invested in expansion.