Updated: IHI, Corinthia to develop, run five-star hotel in London

Malta's International Hotel Investments p.l.c. (IHI), together with Libyan Foreign Investment Company (LFICO) and Istithmar Hotels FZE of Dubai, have bought the old Metropole building near Trafalgar Square in London for re-development as a five-star hotel.

The building was a hotel in the first part of the last century but was more recently used by the Ministry of Defence. IHI will develop the building as a 283-bedroom deluxe five-star hotel and a suite of adjoining luxury apartments. The old facade will be retained.

The deal is reported to have reached £135 million.

IHI said Crown Estate had last year declared its intention to sell the former Metropole and the adjoining 10 Whitehall Place in central London, and had invited bids worldwide.

The joint-venture submitted proposals for the project, along with offers from 26 of the world’s leading developers.

"The joint-venture between IHI, LFICO and Istithmar was ultimately chosen on the basis of the parties’ proposals for the properties, as well as its development experience and financial capabilities to execute the project," IHI said.

On completion, the management of the five-star hotel operation will be entrusted to CHI Limited to operate the property under the Corinthia brand.

A spokesman for the Crown Estate said IHI's bid was not the highest received but was the only one of several which proposed a refurbishment rather than redevelopment behind a retained facade.

The Crown Estate manages the British monarchy's properties on behalf of the UK government, with assets worth more than 7 billion pounds, including all of Regent Street . All of its surplus revenues are paid directly to the UK Treasury.