InterContinental sells seven European properties

InterContinental Hotels Group (IHG) has sold seven European hotels to the Morgan Stanley Real Estate Fund (MSREF).

The €634m (£440m) deal, approximately €80m (£55m) above net book value, is expected to be completed in the third quarter of 2006.

IHG has retained 30-year management contracts for the hotels, with the option of two ten year renewals at IHG's discretion. MSREF has agreed to make investments into the properties of around €60m (£41m).

The deal brings the total number of hotels IHG has sold since separating from Six Continents in April 2003 to 175.

Andrew Cosslett, chief executive of IHG said: "This deal is a significant step for IHG as we near the conclusion of our asset disposal programme."

He added: "IHG is fully focused on its growth target of adding 50,000 to 60,000 rooms to our portfolio on a net and organic basis by the end of 2008."

The portfolio of 2,537 rooms was originally put on the market in January this year.

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By Alix Young

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