Colony Capital yesterday announced the purchase of the hotel interests of Raffles Holdings, including the eponymous 103-suite hotel built in 1887 and named after Sir Stamford Raffles, who had colonised Singapore 68 years earlier.

The deal, which is valued at about $1 billion (£570 million), includes the Swissôtel brand acquired by Raffles Holdings in May 2001. There are 41 hotels, of which 15 trade under the Raffles brand and 26 as Swissôtels. In Britain, Swissôtel has a contract to manage the Howard Hotel in London. In 2003, it sold Brown’s Hotel, also in London, to Sir Rocco Forte for £51.5 million as part of its strategy of focusing on management contracts.

Thomas Barrack, Colony’s chairman and chief executive, said that the 41 hotels would continue to be run under the Raffles and Swissôtel brands and that Colony would “look for opportunities to selectively grow the franchise, especially in Asia . . . We deeply respect the historical significance of the Raffles Hotel in Singapore and we consider it our responsibility to protect that legacy.”

Raffles, famous for the Singapore Sling cocktail, was a favourite watering hole for writers and other luminaries in colonial times, including Somerset Maugham, Joseph Conrad and Rudyard Kipling.

The company was floated on the Singapore stock exchange in 1999 although it is 59.7 per cent owned by CapitaLand, the property developer.

Colony Capital has invested more than $15 billion since 1991, much of it in the leisure sector. Its interests include the Costa Smeralda resort in Sardinia and in March it invested about $1.3 billion in Accor, the French hotel company.

In Britain it is best known for the 1998 Savoy Group deal. A year ago, it sold out to Derek Quinlan, the Irish investor, who sold on The Savoy itself to Prince Alwaleed bin Talal a few months later.

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