Celeb-backed Selsdon Park Hotel deal is sat-X-factor-y

9:31am Thursday 4th January 2007

Croydon's Selsdon Park Hotel is now in the hands of a fund backed by Manchester United manager Sir Alex Ferguson and Simon Cowell, following a deal worth an estimated £290million.

Permira, the private-equity firm, has sold it and five other four-star hotels in the Principal chain to Alternative Asset Investment Management (AAIM) in a 25-year sale and lease back deal.

It is the second time in four months the hotel has changed hands after Permira bought the chain in September from Royal Bank of Scotland.

The deal was wrapped up just days before Christmas and is the biggest ever for the company, lifting the value of its portfolio above £1billion.

The portfolio includes the George in Edinburgh, the Russell in London, the Royal York in York, the Met in Leeds, the Palace in Manchester as well as Selsdon Park. Principal will continue to operate the sites.

The Principal group of hotels has a total of 1,310 bedrooms and a strong focus on conferences, with 80 meeting rooms that can accommodate more than 7,000 delegates.

The purchase is being carried out using the Symmetry fund joint venture that AAIM set up with Bank of Scotland in October to spend £2billion on European property.

In October AAIM bought regional hotel chain Menzies for £190m. Its other investments include the headquarters of electronics giant JVC in London, the National Trust's base in Swindon and two retail parks in Poland.

The company, which launched in 2003, boasts investors including football stars Ryan Giggs, Alan Smith, John Terry and Frank Lampard, pop group The Corrs and TV interviewer and journalist Sir David Frost.

The refinancing has created a bonanza for its investors, earning them three times their original money in three years while retaining their original investment in the building.

The hotel purchases form part of a plan by AAIM to act as a consolidator in Britain's provincial four-star market and the transaction with Permira is just one of many pre-Christmas deals for AAIM.

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