Middle East investors eyeing up London landmark

Kuwaiti and Qatari sovereign wealth funds are reported to be in talks with a developer over the possible acquisition of a former governmental building in London which is being transformed into a £10,000 (US $17,013) per night luxury hotel.

The Galliard Group is currently in the middle of a £50 million (US $58 million) project to convert the former Scotland Yard (police) and Ministry of Defence headquarters into a luxury hotel with 235 bedrooms, a VIP suite, a ballroom and a high end restaurant.

According to The Telegraph, the company’s chief executive, Stephen Conway, has recently met individuals from the Middle East who have shown interest in buying the historic building once construction has been completed in 2016. The deal would be worth around £200 million (US $340 million).

“We are currently in discussions with representatives of sovereign wealth funds and ultra high net worth, private investors from the Gulf states, including Qatar and Kuwait,” he told the British newspaper.

“The Gulf investors see Whitehall buildings such as great Scotland Yard as AAA investments that will grow in value over the long term and are a good diversification away from their traditional oil and gas sector holdings.”

The purchase of the hotel would be the latest in the string of high profile investments by Middle Eastern buyers in Europe.

According to global hotel consultancy HVS London, Middle Eastern investors spent €2.3 billion (US $3.2 billion) on hotel transactions across Europe in 2013, accounting for 30% of all transactions.