Hong Kong firm buys into London site

A historic Hong Kong hotel business is poised to make its first move into London after agreeing to spend £132.5m on a half-share of a new site near Hyde Park Corner.

Hong Kong and Shanghai Hotels, which operates under the Peninsula Hotel brand and opened its first hotel in Hong Kong in 1928, is buying out Derwent London's 50 per cent stake in a joint venture with Grosvenor Estates, in order to redevelop 1-5 Grosvenor Place in Belgravia into offices and a luxury hotel.

Peninsula operates nine hotels around the world, most recently opening a hotel in Shanghai in 2009.

Derwent, which has owned the buildings on the site for nearly 20 years, should book a £53m profit on its share of the joint venture after Grosvenor extended its leases on the site to 150 years last year.

John Burns, Derwent's chief executive, said: "We took a view that the hotel development was more effective and we're not in the hotel business."