The buyer of two of London's leading hotels, the Sanderson and St Martin's Lane, has been confirmed as Middle Eastern investor Capital Hill Hotels.
Morgans Hotel Group (MHG), the operator and co-owner of the joint venture with US-owned real estate investment company Walton Street, has sold the two hotels for £192m, which represents a value of approximately £542,000 per room.
MHG will continue to operate the 150-bedroom Sanderson and 204-bedroom St Martins Lane under long-term management agreements, the terms of which - including extension options - have been extended to 2041 from 2027.
Sales proceeds, along with cash in escrow, will be used to retire around £99.5m of outstanding mortgage debt, which is secured by the two hotels.
MHG's 50% share of the net proceeds, after the repayment of debt and closing costs, is expected to be approximately £44.8m, which the company intends to use to provide capital for growth.
Michael Gross, chief executive of MHG, said: "Our continued management of these two great London assets and the proceeds from the sale will help provide the foundation for continued growth of our management business and brands around the world."
The sale is expected to complete by the end of the year, subject to satisfaction of customary closing conditions.
By Janie Stamford
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