New Hotel to Replace U.S. Embassy in London?

The Times is reporting that the U.S. will be selling its embassy building in Grosvenor Square, Mayfair, to a Qatari sovereign wealth-backed developer for an undisclosed sum.

The U.S. State Department said yesterday that it would sell the Chancery building, home to the U.S. Embassy in Britain for almost 50 years, to Qatari Diar, a real estate investment company owned by the Qatar Investment Authority (QIA).

The Qatari investment group has not yet given full details of its plans for the site, but it is thought to be planning a luxury hotel and residential apartments. Chelsfield Partners, run by Sir Stuart Lipton and Elliott Bernerd and 20 percent-owned by QIA, will be development partners on the project.

The building was worth an estimated £500 million at the peak of the market in July 2007, when Qatari Diar was first linked with a possible purchase. It is thought to be worth much less now after a 45 percent decline in commercial property values.