InterContinental Hotels Group Plc has agreed to sell the InterContinental Hong Kong to a group of investors advised and managed by Gaw Capital Partners for $938 million.

InterContinental will retain a 37-year management contract for the hotel, the Denham, UK-based company said on Friday. It will make a $700-million pretax profit from the sale, with an estimated non-cash tax charge of $40 million.

The owner of the Holiday Inn and Crowne Plaza brands has been divesting properties in the past decade as it focuses on operating hotels rather than owning them. In December last year, InterContinental accepted a 330-million-euro ($366 million) cash offer from Constellation Hotels Holding Ltd for Le Grand hotel in Paris.

Gaw Capital said it will refurbish the five-star hotel, which occupies a harborfront site in Kowloon, overlooking Victoria Harbour. Work is expected to start in 2017 and take about 18 months.

InterContinental Hong Kong has 503 rooms and the city's largest presidential suite at 7,000 square feet, according to its website. It is home to Spoon by Alain Ducasse, a French eatery that has won two Michelin stars, and an outpost of Japanese chef Nobu Matsuhisa's namesake restaurant.

The 17-story property, which opened in 1980 as the Regent Hong Kong hotel, was previously owned by billionaire Cheng Yu-tung's New World Development Co Ltd. New World sold the hotel in 2001 for 241 million pounds ($371 million).

Family-owned Gaw Capital is a Hong Kong-based private-equity fund manager specializing in real-estate projects ranging from boutique hotels to commercial real estate and logistics infrastructure.

As of the first quarter, it had raised equity of $4.26 billion and had $9.16 billion under management.

Besides Hong Kong, Gaw has projects in London, Chicago, Seoul, Beijing and Ho Chi Minh City.

InterContinental shares jumped by up to 4.8 percent - the most in two-and-a-half months - in London during morning trading on Friday.

(HK Edition 07/11/2015 page7)