Four book place in Holiday Inn auction

INTERCONTINENTAL Hotels Group is assessing four serious £1bn bids for its Holiday Inn properties in Britain.

The group, soon to be led by incoming chief executive Andy Cosslett - seen as a brand manager - is selling the buildings but keeping the management contracts to free up cash for investment to grow its brands.

Last night was the deadline for second-round bids. Offers came in from Morgan Stanley's real estate arm, Goldman Sachs' Whitehall property fund, US venture capitalist Blackstone's property division and Lehman Brothers Real Estate.

All are bidding for the full package of 75 hotels, most of them operating as Holiday Inns.

The offers are understood to be in their early stages, with bidders only making indicative price ranges.

The sale is part of IHG's policy of selling properties around the world. Earlier this month, it sold 13 hotels in the Americas to the Hospitality Properties Trust.

British hotels are being stalked by US real estate investment funds as they offer stable cashflow from lease charges. Strong yields and low interest rates also make them appealing.

Selling prices have held up despite a glut of hotels on the market - Whitbread, Hilton and IHG have all placed parcels of properties in recent months. Some observers have suggested the bidding for IHG's hotels could reach £1.1bn.

Neither IHG nor Jones Lang LaSalle and Citigroup, who are handling the sale, would comment.