THE hotel operator InterContinental Hotels Group (IHG) is to announce the sale of seven hotels in continental Europe to Morgan Stanley Real Estate Fund for about £400 million, The Times has learnt.

The group is also understood to have appointed agents to find a buyer for the Crowne Plaza hotel at Blackfriars, in the City of London, in which it has a minority stake, for more than £70 million.

The best-known of the seven InterContinental-branded hotels that Morgan Stanley is acquiring is the Carlton in Cannes, on the French Riviera. The others are in Amsterdam, Budapest, Rome, Frankfurt, Madrid and Vienna.

As part of the deal, IHG will retain a long-term management contract to continue running the properties. Morgan Stanley has also agreed to reflag a hotel that it owns in Australia as an InterContinental, with IHG taking over the management. Similarly, a hotel it owns in Japan may become a Crowne Plaza.

The Crowne Plaza at Blackfriars, which has 203 rooms, will be sold via the same “sale and manage-back” process. IHG owns 33 per cent of the hotel, with two Middle Eastern investors owning the balance. Jones Lang LaSalle Hotels is the agent in the sale.

The disposal of the eight hotels will take total proceeds raised by IHG since its demerger from Six Continents three years ago to more than £2.8 billion. It has returned, or committed to return, most of the cash to shareholders, although some of the latest proceeds could be invested in expansion.

IHG is also hoping next month to sign a deal to take management control of the Japanese hotels and resorts of All Nippon Airways.

IHG declined to comment.

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