IHG will continue to manage the hotel under a long-term management agreement.
The sale is a continuation of IHG’s strategy of growing its management and franchise businesses and reducing capital intensity. Since 2003, IHG has released $5.7 billion of capital through the sale of 187 hotels and the divestment of equity stakes. Over the same period, IHG has returned almost $6 billion to shareholders. During 2011 alone, IHG has agreed proceeds of over $140m for the sale of three hotels and divestment of an equity stake, with a combined net book value of $105m. Following this sale, IHG has 12 owned hotels with the InterContinental New York Barclay currently on the market.
Richard Solomons, incoming Chief Executive and currently CFO and Head of Commercial Development of IHG, said: “The sale of the Hotel Indigo San Diego is another great example of our asset light strategy and brand building in action. We built this showcase Hotel Indigo using IHG’s own capital in 2009 to drive growth of this branded-boutique hotel brand across the Americas and accelerate international expansion.” Since then IHG has signed 45 Hotel Indigo hotels globally including 14 in Europe and 6 in Asia. Solomons added: “We are now able to recycle the capital to develop our brands, for example through the recently announced joint venture with Brack Capital Real Estate to develop a Hotel Indigo hotel on the Lower East Side of Manhattan.”
“We are extremely pleased to acquire San Diego’s first LEED-certified hotel and our first Hotel Indigo property” said James Francis, President and CEO of Chesapeake Lodging Trust. “IHG has a superb track record in lodging and from launch in 2004 has quickly established Hotel Indigo as a premier brand. We are very excited to be developing a long-term relationship with IHG and look forward to working with them on this high quality hotel, as well as future opportunities.”