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IHG Sells Hotels for $804M

LONDON-Intercontinental Hotels continues its euro 4.1-billion ($5.2-billion) asset sale with the disposal of seven hotels to Morgan Stanley Real Estate Funds.

By Anita Howarth | Updated on July 13, 2006

LONDON-Intercontinental Hotels has sold seven hotels in Europe to Morgan Stanley Real Estate Funds for euro 634 million ($804 million). The portfolio has been on the market since January and the price includes a premium of euro 80 million ($101 million) over the net book value.

IHG officials say that they had retained management contracts for 30 years on the hotels, with potential extensions up to 50 years, and that the fund will invest about euro 60 million ($76 million) in the portfolio. This influx will fuel implementation of new brand initiatives and add facilities. Normalized management fees are expected to generate about euro 10 million a year ($12.7 million).

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