InterContinental Hotels Group (IHG) has signed a deal to open its second InterContinental-branded hotel in London.
The company, which opened its flagship InterContinental London Park Lane in 1975, has agreed a 20-year management contract with franchisee Splendid Hotel Group for a 254-room six storey property in Westminster.
InterContinental London Westminster, scheduled to open in late 2011, will occupy the former Queen Anne's Chambers, originally built in the 19th century. The 120,000 square foot freehold site close to New Scotland Yard is currently office and retail space.
Splendid Hotel Group is an existing IHG franchisee with Holiday Inn hotels in Manchester and London. The new signing is its biggest acquisition to date, with the hotel set to cost an estimated £100m.
Kirk Kinsell, IHG's president for Europe, Middle East and Africa, said: "Despite the tough economic times the fact that we continue to sign major deals is testament to the strength of our brands. We're adding 5,000 rooms in the UK in the next two to three years."
The opening of a second InterContinental in London will allow IHG to investigate the potential of releasing some or all of the equity in its Park Lane property.
Over the past six years, the company has sold the underlying assets of all but a select number of its hotels, mainly its flagship properties in London, Paris, New York and Hong Kong. IHG has said it will consider selling the equity on these hotels, but only after signing contracts for second properties in these cities.
By Daniel Thomas
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