Sol Melia buys London hotel for EUR 133m

Spanish hotel chain Sol Melia has confirmed the acquisition of a Norman Foster-designed hotel redevelopment in the financial and tourist heart of London for EUR 133 mln.

The City Bank property on London's Strand was sold by Anida, a subsidiary of BBVA bank, which had initially lent money to Spanish developer Urvasco to build the scheme.

The half-completed five-star hotel redevelopment was placed into receivership in July last year after the builder failed to complete it. In January BBVA put the asset on the market through administrators PwC with a starting price of £110 mln (EUR 130 mln).

Sol Melia, which is taking over responsibility for finalising construction and equipping the hotel, said it expects to invest EUR 52 mln to finalise the scheme, which will open before the 2012 Olympics. 'The opening of the ME London Hotel near Trafalgar Square will consolidate the strong reputation of the Spanish brand in international markets,' the company said.

The hotel will provide 173 rooms as well as a 730 m² convention centre, restaurants and bars. It will become the second hotel for the Sol Melia chain in the British capital, joining the Melia White House, located next to Regent's Park.

Earlier this week, Sol Melia sold the Sol Pelicanos Ocas hotel property located in Benidorm, near Alicante to Madrid-based BBVA Renting for nearly EUR 74 mln.