IHG Sells Hotel Indigo San Diego for US$55.5m

InterContinental Hotels Group has sold the 210-room Hotel Indigo San Diego to Chesapeake (Chesapeake Lodging Trust) for US$55.5 million in cash. IHG will continue to manage the hotel under a long-term management agreement.

The sale is a continuation of IHG’s strategy of growing its management and franchise businesses and reducing capital intensity. Since 2003, IHG has released $5.7 billion of capital through the sale of 187 hotels and the divestment of equity stakes. Over the same period, IHG has returned almost $6 billion to shareholders. During 2011 alone, IHG has agreed proceeds of over $140m for the sale of three hotels and divestment of an equity stake, with a combined net book value of $105m. Following this sale, IHG has 12 owned hotels with the InterContinental New York Barclay currently on the market.

Richard Solomons, incoming Chief Executive and currently CFO and Head of Commercial Development of IHG, said, "The sale of the Hotel Indigo San Diego is another great example of our asset light strategy and brand building in action. We built this showcase Hotel Indigo using IHG’s own capital in 2009 to drive growth of this branded-boutique hotel brand across the Americas and accelerate international expansion."

 Since then IHG has signed 45 Hotel Indigo hotels globally including 14 in Europe and 6 in Asia.

“We are now able to recycle the capital to develop our brands, for example through the recently announced joint venture with Brack Capital Real Estate to develop a Hotel Indigo hotel on the Lower East Side of Manhattan,” Solomons added. 

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