InterContinental Hotels Group (LON:IHG) has sold its 422 room InterContinental Buckhead Atlanta to Maryland based Pebblebrook Hotel Trust for US$105 million in cash. The move is in line with its strategy to reduce capital intensity and grow its management and franchise businesses as it will still manage the hotel under a long term contract.
The hotel opened in November 2004 and has generated revenues of US$30.6 million and earnings before interest and tax (EBIT) of US$6.7 million in 2009. Its net book value stood at US$82.7 million at 31 March 2010.
Since 2003, IHG has disposed of 185 hotels globally with a combined net book value of US$5.3 billion and with proceeds in excess of net book value.
“The sale of the InterContinental Buckhead Atlanta is a great example of our asset strategy in action...we are now able to recycle the capital we have invested in the building whilst maintaining a long term management contract with a great partner, reinforcing the strength of the brand,” said chief financial officer and head of commercial development at InterContinental Hotels, Richard Solomons.
The new owners will invest US$7 million in capital improvements.
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