Middle Eastern investor Capital Hill Hotels is acquiring two London hotels for £192 mln (EUR 220 mln). The vendor of the Sanderson and St Martins Lane hotels is Morgans Hotel Group (MHG), the operator and 50% owner of the London joint venture that owns the two hotels.

The investment volume represents a value of EUR 623,000 per room.

US-based MHG will continue to operate the hotels under long-term management agreements. The terms of the management agreements, including extension options, have been extended to 2041 from 2027. MHG is a 50% owner of the hotels through a joint venture with an affiliate of Walton Street Capital.

The joint venture partners will use the proceeds of the sale, along with cash in escrow, to pay down the £99.5 mln of outstanding mortgage debt, which is secured by the two hotels.