US embassy deal could include hotel

the announcement that the US has agreed to sell its London embassy in the prestigious Grosvenor Square to Gulf investor Qatari Diar, there are strong rumours that the site could be developed into a luxury hotel.

The square already is home to the 5 star London Marriot Hotel and the 4 star Millennium Mayfair, but the Qatari investment group has not yet provided full details of its plans for the site, but it is firmly believed that the group is planning mixed use development with a luxury hotel and residential apartments.

The price of the property, known as the Chancery, was not disclosed, but has been estimated to be worth £500 million at the peak of the market in July 2007, however has been believed to have dropped by about 45 percent in commercial property values.

The purchase has been the latest in the number of European real estate acquisitions for Qatari Diar, the property arm of Qatar’s sovereign wealth fund, as the company has withdrew Lord Rogers’ modernist design for the 12.8 acre Chelsea Barracks site in west London, after Prince Charles referred to the plan as unsympathetic.

The United States will continue to occupy the Chancery until the relocation to the new complex in Wandsworth is complete which is expected to be by 2016 or 2017.