IHG Sells InterContinental Buckhead Atlanta
July 1, 2919 - InterContinental Hotels Group PLC [LON: IHG; NYSE: IHG] announces the sale of the 422 room InterContinental Buckhead Atlanta to Maryland based Pebblebrook Hotel Trust for US$105 million in cash. IHG will continue to manage the hotel under a long term management contract.
IHG opened the hotel in November 2004 as the first newly built luxury hotel to enter the Buckhead market for over a decade. The hotel generated revenues of US$30.6m, EBITDA of $9.4m and EBIT of $6.7m in 2009 and had a net book value of US$82.7m at 31 March 2010. Pebblebrook will invest approximately $7m in capital improvements.
The sale is a continuation of IHG's strategy of growing its management and franchise businesses and reducing capital intensity. Since 2003 IHG has disposed of 185 hotels globally with a combined net book value of $5.3bn and with proceeds in excess of net book value.
Richard Solomons, Chief Financial Officer and Head of Commercial Development, said: "The sale of the InterContinental Buckhead Atlanta is a great example of our asset strategy in action. We built the hotel using our own capital in 2004 to create a showcase for the brand in order to drive growth across the Americas. Since then we have signed 21 InterContinental hotels in the region. 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."
"We are extremely pleased to acquire one of Buckhead's leading hotels in one of the nation's fastest growing metropolitan areas," said Jon Bortz, Chairman, President and Chief Executive Officer of Pebblebrook Hotel Trust. "IHG has a superb track record in lodging and boasts a premier brand with InterContinental. We are very excited to be developing a long-term strategic relationship with IHG and look forward to working with them on this high quality hotel, as well as future opportunities."
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