HSH will pay Grosvenor £107.5m in cash to acquire its 50 per cent stake in the project.
The Hong Kong-based group will take full ownership of the development and be entitled to 100 per cent of the profits from the hotel and sales its 24-28 residential units, while Grosvenor will continue as freeholder and landlord of the site.
The partners secured planning permission in December 2015 to replace the existing 1960’s office blocks with a 190-room luxury hotel complete with a spa, shops, bars and restaurants.
It will be the first UK site for the Peninsula Hotels brand, which operates ten five-star hotels around the world.
Peter Vernon, CEO at Grosvenor Britain and Ireland, said the decision would allow Grosvenor to secure a ‘long term income’ from the rental of the hotel which would be reinvested in the group’s London estate.
“I very much look forward to seeing the hotel flourish and thrive within the existing communities of Belgravia,” he said.
“The project team has achieved great success in designing and securing planning for a new London landmark that will bring investment and employment to this part of the West End.”
HSH aims to start construction in 2017, with the hotel set to be completed in 2021.
Clement Kwok, managing director and CEO of HSH, said: “We are excited to move ahead with the next phase of development, which we believe will ultimately benefit London’s tourism industry as well as provide enhanced services and attractions for the local community.”