India's Sahara India Pariwar Ltd. has agreed to buy a controlling stake in New York's famous Plaza Hotel for $570 million, placing a bet on one of the most robust U.S. hotel markets.
Sahara will gain 75 percent in the century-old hotel, buying out Israeli company Elad Properties, which renovated the historic building, and cutting minority owner Saudi Arabia's Kingdom Holdings' portion to 25 percent. Fairmont Hotels & Resorts is expected to continue to manage the hotel, which reigns over Central Park's southeast corner.
The deal encompasses the building's 282 hotel rooms but doesn't include the property's 152 luxury condos, which were created after El Ad hired architect Costas Kondylis to renovate the property.
Sahara has gone after other hotels in prestigious locations. It also bought the prominent Grosvenor House Hotel in London in 2010 from the Royal Bank of Scotland (NYSE: RBS) for $726 million and is reportedly in talks to purchase 85 percent of the recently built Dream Downtown Hotel in New York, according to India Today.
New York's hospitality sector has outpaced the rest of the country as it benefits from high tourism. Manhattan's hotel occupancy rate was 91.3 percent in May, up from 89.2 percent in the prior year, according to the New York City Economic Development Corporation.
The strength of the city's real estate market has enticed foreigners, including both individuals and companies, to buy property as Europe's economy is in turmoil and Asia's growth cools.