London hotels sold to Middle East for $295m

A Middle East investor is to buy two luxury London hotels in a deal worth $295m, the US owner of the properties has confirmed. The Sanderson and St Martins Lane hotels will be sold to Capital Hill Hotels, said New York's Morgans Hotel Group (MHG), the operator and 50 percent owner of the joint venture that owns the London properties. The buyer was described as a Middle East investor with existing global hotel holdings, in a statement on MHG’s website. The sale is expected to be completed by the end of the year, and will see MHG remain as operator of the two properties. “The sales price for the two hotels represents a value of approximately £542,000 or $832,000, per room,” the statement said. “The joint venture partners will use the sales proceeds, along with cash in escrow, to retire the approximately £99.5m of outstanding mortgage debt, which is secured by the two hotels. “MHG's 50 percent portion of the net proceeds, after the repayment of debt and closing costs, is expected to be approximately $70m.” The news comes weeks after Qatar-based investment group Al Faisal Holding paid close to £200m ($313m) to acquire the W London Hotel in Leicester Square. The deal marked the latest in a series of investments in British assets by Qatari buyers. The Gulf’s state’s wealth fund counts luxury London department store Harrods and stakes in Barclays, retailer J Sainsbury’s and the London Stock Exchange among its investments. Qatari Diar, Qatar Investment Authority’s property arm, in August announced it had won a bid to buy London’s Olympic Village in a £557m in a joint deal with the UK developer Delancey. The gas-rich emirate last month denied media reports it was close to a deal to take over the world-famous Silverstone racing circuit in the UK.