Following the news that Starwood Capital Group has agreed to sell its portfolio of UK hotels to Foncière des Régions, InterContinental Hotels Group has entered into a conditional agreement with FdR to rebrand and operate 12 of the open hotels and one pipeline property.
The deal will establish IHG as the leading luxury hotel operator in the UK, taking it to more than 2,000 rooms in this valuable, fast growing segment. It will expand the presence for the InterContinental brand, and enable IHG to launch its leading luxury boutique brand, Kimpton Hotels & Restaurants in the UK, adding multiple hotels for the brand in prime locations in major city centres, including London, Manchester and Edinburgh. This marks an important step in IHG’s plans to take the brand global, building on the first signings for Asia and China last year, and will act as a catalyst for Kimpton’s growth in Europe.
The agreement will also strengthen IHG’s position in the upscale segment in the UK, and will establish a presence for its new upscale brand, which will be launched later this year. The brand, principally focused on conversion opportunities, will capitalise on the significant opportunity IHG has identified to offer consumers an informal but differentiated experience in the upscale segment, whilst offering owners a strong return on investment. These hotels will provide high-quality representation for the brand in IHG’s largest market within the Europe, Middle East, Asia & Africa (EMEAA) region, where it will initially be launched.
Keith Barr, Chief Executive Officer, IHG comments: “We are focused on continuing to expand our leadership in luxury and upscale, which are both high-value segments with significant growth potential. Bringing Kimpton to such an important market as the UK is a key part of our plans, as is the introduction of our new upscale brand, which will provide an exciting, differentiated offering to both guests and owners. Together with the recent addition of Regent Hotels & Resorts to our portfolio, we are building real momentum behind our plans to deliver industry-leading net rooms growth.”
The transaction is expected to close during the second or third quarter of 2018 upon satisfaction of certain customary conditions.