RBS selling 47 Marriott hotels in £1bn deal

ROYAL Bank of Scotland is understood to be putting the final touches to a £1 billion deal to sell 47 upmarket Marriott hotels across the UK in a rapid turnaround of its investment since buying them last spring.

RBS is selling the portfolio to a consortium spearheaded by Delek Belron Real Estate, a subsidiary of Israeli property company Delek Real Estate.

Other members of the consortium include another Israeli group, Electra Real Estate, FIBI Investment, the main Israeli investment arm of FIBI Holdings, and Dublin-based Quinlan Private. Yigal Ahuvi, an Israeli businessman who has been a major player in British property deals, is also believed to have an involvement.

An RBS spokesman declined to confirm or deny the deal yesterday, but he said: "Our normal strategy with our hotels portfolio is to sell on as quickly as possible when we can find an appropriate buyer."

It is believed talks on the sale have been going on for several months. RBS bought 46 of the hotels from a joint venture between Marriott International and Whitbread last April for 951 million. It paid an extra 30m for a separate Marriott development.

The portfolio being sold includes the landmark County Hall hotel in London, near the London Eye tourist attraction.

It is thought Delek Belron Real Estate is to take a 17 per cent stake in the hotels, with Electra Real Estate taking 9.9 per cent. The consortium is expected to provide more than 200m of equity and has got a long-term loan of more than 850m from RBS to bankroll the acquisition.

Under the deal, it is expected RBS will be entitled to 20 per cent of the profits from any future sale of the hotels excluding an annual 2.5 per cent increase in their value.

The portfolio has a total of 8,456 rooms and will be managed by Marriott under a 30-year agreement.

It is expected the transaction will be completed by the spring.