Hilton Group sells 15 of its UK hotels

Hilton Group completed the sale of 15 of its UK properties in November. The hotel company, which operates 400 properties outside of the US, sold the properties, including the London Gatwick Airport and London Olympia hotels, to The Managed Hotels Unit Trust, with funding arranged by the Royal Bank of Scotland under a ‘sale and manage back’ agreement.

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By  Sarah Campbell Published  December 15, 2005

Hilton Group completed the sale of 15 of its UK properties in November. The hotel company, which operates 400 properties outside of the US, sold the properties, including the London Gatwick Airport and London Olympia hotels, to The Managed Hotels Unit Trust, with funding arranged by the Royal Bank of Scotland under a ‘sale and manage back’ agreement. As a key part of the transaction, the hotels will continue to be branded Hilton under long-term management agreements with an initial term of thirty years and two options for 10 years following that. The annual income for Hilton from the management contract is expected to be around US $9.25 million. Following the high level of market interest in the sale, Hilton International intends to place further hotels on the market with a value in excess of US $685 million, including the Hilton London Metropole and the Hilton Birmingham Metropole. It is expected that an additional five UK hotels will be put on the market early next year. In addition, the group is considering selling off some of its international properties, with the Hilton Luxembourg and the Hilton Durban, together worth an estimated US $68.5 million, predicted to come under the hammer. “There was widespread interest in the hotels and this has prompted us to put more up for sale,” Brian Wallace, deputy chief executive, Hilton Group, told Reuters. The UK group is currently engaged in talks with Hilton Hotels Corporation to sell off its entire hotel division. Hilton Group received an offer from US Hilton in October. While the amount of the deal is still under wraps, sources have indicated that it was worth US $6.2 billion.

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