London Appealing More Than Ny For Hotel Buyers | MarketWatch

London is outpacing New York in the real estate market - especially with wealthy buyers from overseas, analysts say.

InterContinental Hotels Group PLC is still waiting to sell the InterContinental New York Barclay hotel, one of its limited number of trophy properties, but it had no problem marketing another of its key assets in London recently.

The world's biggest hotelier by number of rooms flagged the sale of the 87-year-old Barclay in early 2011 to take advantage of its location in the heart of midtown Manhattan's exclusive East Side. It found an exclusive buyer, but the talks then broke down. Analysts said the property was "tired" and IHG was forced fund a renovation.

"It was pulled from listing and now they are investing potentially up to $100 million to give it the lick of paint that it needed in order to attract certain buyers," said Panmure Gordon analyst Karl Burns, adding that "it's still listed for sale, but I don't think it is being marketed much."

However, IHG said Wednesday it had completed the sale of the InterContinental Park Lane in London, another of its prized assets, to a Middle Eastern private investment group. On the market for only six months, the hotel sold for $469 million gross cash, over $85 million more than industry-analyst forecasts. The group had acted swiftly to capitalize on emerging economies buying in the U.K. capital's buoyant real estate market, fuelled by interest from sovereign wealth funds, wealthy investors and overseas real estate trusts.

"London Park Lane, it doesn't get much better than that. The [hotel] has had a good amount of cash spent on it," said Andreas Scriven, Director and Head of Consultancy at Christie & Co., a hotel and leisure property advisor.