A PROPERTY fund run by Goldman Sachs has put an estate of hotels managed by Intercontinental Hotels Group (IHG) on the market for an estimated £500m.

The 46 properties owned by the Whitehall fund are mainly in France, Belgium and Italy. Most are run under a franchise agreement with IHG and trade under the operator’s Holiday Inn and Crowne Plaza brands.

The sale process is in its early stages and potential bidders are likely to be sent details of the hotels in the next few weeks.

IHG has sold most of its hotels to funds such as Whitehall, returning the proceeds, some £3.6 billion, to shareholders. The disposal usually involves an agreement for it to carry on running the hotel while collecting a management or franchise fee.

This sort of arrangement has become more popular as the market for hotel properties has become hotter.

Although this estate forms a small part of Whitehall’s hotel portfolio, the fund is looking to cash in on the current boom.

In its management agreement, IHG is likely to have the right to veto any potential buyer of the properties.

But the hotelier would welcome a change of ownership, analysts said, because it would probably lead to fresh investment in the properties.

New owners often spend money on hotels after they acquire them to help increase occupancy levels.

The move by Whitehall comes as a number of hotel assets compete for investors’ attention.

Jurys Inn, an Irish hotel chain, is being auctioned, and is expected to fetch about €1 billion (£680m). Hilton is selling a package of European properties, while investors in Dawnay Shore Hotels, which includes the Lygon Arms in the Cotswolds, await the sale of its properties.

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