Lehman Brothers Real Estate Partners, GIC Real Estate and Realstar Asset Management have closed the landmark deal of the year by acquiring 73 InterContinental Hotels Group properties across the UK from InterContinental Hotels Group plc (IHG) for £1 billion. This deal is the largest UK hotel property portfolio transaction ever.

Jones Lang LaSalle Hotels and CitiGroup acted for IHG.

This transaction will see InterContinental Hotels Group retain long term management of the bulk of the hotels operated under the Holiday Inn, Crowne Plaza and Holiday Inn Express flags.

The portfolio includes the 908 bedroom Holiday Inn London Kensington Forum, the world's largest Holiday Inn, both the Crowne Plaza and the Holiday Inn M4 J4 at Heathrow Airport as well as assets in Birmingham, Leeds, Manchester, Newcastle and Edinburgh.

Mark Wynne Smith, European CEO, Jones Lang LaSalle Hotels, said: "InterContinental Hotels Group has built a balanced hotel portfolio with a good mix of city centre, conference and key motorway junction products that have historically outperformed the regional UK market. There is significant upside for the new owner of the portfolio based on the attractiveness of the assets in their markets, their strong branding and management and the continuing economic recovery."

Arthur de Haast, Global CEO said: "This transaction highlights two key realities of the current market behaviour. First, a continued trend towards sale and management-back which avoids the balance sheet commitments of leases. Secondly, as the hotel market is on the route to recovery with strong growth in cash flows, there is an increasing appetite for hotel acquisitions.

Many investors are seeking to place their funds before the markets get to a mature level or interest rates start to rise."