The Malmaison hotel group has emerged as the front runner to buy the original Scotland Yard headquarters, which is being transformed into a £10,000-a-night luxury hotel.
The chain of British hotels is the likely winner of a race to acquire the five-star hotel on Pall Mall, to be called Great Scotland Yard, and is believed to be paying around £200m.
Galliard Homes, the London-based development group which owns the site, expects to complete the conversion in 2016.
Talks had originally been held with representatives of sovereign wealth funds and ultra high-net-worth private investors from the Gulf states, including Qatar and Kuwait, but now Malmaison appears to be in pole position to complete the deal within the next few weeks.
The chain of 13 hotels located in cities such as Oxford, London and Birmingham, is owned by the Denver-based private equity firm, KSL, which bought it out of administration in March last year.
Stephen Conway, the chief executive of Galliard, declined to comment.
Galliard, the largest private housebuilder in the capital, purchased the Edwardian, Grade II-listed site, which was once home to Scotland Yard and the Ministry of Defence, in December last year, with the intention of transforming it into an upmarket hotel.
Galliard’s construction project, which began in January and is also funded by the Crown Estate, is estimated to cost £50m.
Plans for the seven-floor building, which featured in the 2007 film Atonement, include 235 bedrooms, a VIP suite, a vast ballroom and a high end restaurant.
This development is part of the transformation of government buildings in Whitehall to residential and leisure addresses.
The Corinthia Hotel in Whitehall Place was a former political stronghold, and Admiralty Arch on the Mall is also being converted into a hotel.