Qatar's Constellation has closed the €330 mln purchase of Le Grand luxury hotel in Paris from InterContinental Hotels Group (IHG).
Qatar's Constellation has closed the €330 mln purchase of Le Grand luxury hotel in Paris from InterContinental Hotels Group (IHG).
Constellation - part of the Qatar Investment Authority (QIA) - has also committed to invest a further €60 mln in the renovation of the hotel.
The 470-room Le Grand is located in the heart of Paris overlooking the Opera House.
The sale - which was first announced in December last year - involves IHG's last remaining asset in Europe, the company said in a statement.
Under the agreement, IHG will retain a 30-year management contract on the hotel, with three 10-year extension rights at IHG’s discretion, giving an expected contract length of 60 years. Management fees are expected to come to €4 mln ($5 mln) per annum.
The hotel first opened in 1862 and has operated under the InterContinental brand since 1982. In 2013, the hotel generated revenues of $118 mln and EBIT of $22 mln. The bid represents a 29% premium to the hotel’s book value at end-June of $342 mln (€255 mln).
JLL’s Hotels & Hospitality Group acted as the advisor for IHG.
'This is a landmark deal for IHG which sees them not only sell their last asset in Europe, but also marks the largest hotel deal in Paris this year. The close relationship we have with both parties and our knowledge of the requirements on both sides of the deal was essential in helping us to complete the sale,' said Patrick Saade, vice president of JLL’s Hotels & Hospitality Group in London.
Mark Wynne-Smith, Global CEO of JLL’s Hotels & Hospitality Group added: 'We know this buyer extremely well and understand their strategic requirements. Strategic partnerships like this help us reach our aspirations of delivering truly global investment strategies that deliver maximum value for our clients.'