Singapore’s historic Raffles Hotel has been sold to Qatari Diar investment fund by Fairmont Raffles Hotels in a deal worth $275 million.

The Saudi multi-billionaire Prince Alwaleed Bin Talal, who owns a controlling stake in Fairmont Raffles, put the hotel up for sale over a year ago through his Kingdom Holding Company with an original price tag of $350 million.

The 103-room hotel, famed for its colonial splendour and as the home of the Singapore Sling cocktail, was put secretly up for sale a year ago by the Saudi multi-billionaire Prince Alwaleed Bin Talal, whose Kingdom Holding Company owns a controlling stake in Fairmont Raffles. The original price tag was $350 million.

News of a possible sale of Raffles by The Times follows the purchase this week by Qatari Diar of a 40 per cent stake in Fairmont Raffles itself.  This reduces Kingdom’s stake from 58 per cent to 35 per cent.

Both Fairmont Raffles and Kingdom have confirmed that a sale of the Raffles Hotel is under discussion. However, according to The Times, the Qataris are still trying to quantify the amount of money required to refurbish the hotel and revamp the adjacent retail and leisure facilities. The project, including the addition of another 78 guest rooms, is expected to cost as much as $100 million.

The Fairmont Raffles, created from the merger four years ago by the merger of the Fairmont and Raffles groups, operates more than 100 hotels globally, some under the Swissôtel chain. Its Fairmont-branded portfolio includes The Savoy, in London, which is scheduled to reopen in the next few months after the completion of a refurbishment.

Under the Sinagpore Raffles deal, Fairmont Raffles would continue to manage the hotel, and would mirror the sale and manage-back deals the group has struck on a number of properties including the Fairmont Banff Springs, Canada.

The Raffles Hotel was founded in 1887 and former guests include Noël Coward, Charlie Chaplin, Elizabeth Taylor, the Queen, Michael Jackson and Beyoncé.