File image: Independent Media

Hong Kong - InterContinental Hotels Group 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, England-based company said in a statement Friday. It will make a $700 million pretax profit from the sale, with an estimated non-cash tax charge of $40 million, according to the statement.

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

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

Selina Zhu, a spokeswoman at Gaw Capital in Shanghai, declined to answer questions pending the distribution of a press release from the company.

Presidential Suite

The hotel has 503 rooms and Hong Kong’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 Hong Kong billionaire Cheng Yu-tung’s New World Development 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, according to the company’s website. Gaw has projects in London, Chicago, Seoul, Beijing, Ho Chi Minh City and Hong Kong.

InterContinental shares jumped as much as 4.8 percent, the most in two and a half months, on Friday in London.

Bloomberg