The prospect of high returns and a British tourism boom prompted Chow Tai Fook Group and some partners to snap up a luxury hotel in central London for £125.15 million (HK$1.6 billion). The 237-room Marriott London Grosvenor Square Hotel is next to the US embassy in exclusive Mayfair and rooms go for about HK$2,500 a night. The deal works out at £528,000 for each room, making it the second-most expensive hotel deal in London this year in terms of price per room. New York-listed Strategic Hotels & Resorts announced it had sold the hotel to an affiliate of Hong Kong-based private equity firm Joint Treasure International. Daniel Yiu, senior adviser at Joint Treasure, said yesterday that he, Chow Tai Fook Group and some partners had bought the hotel. "The hotel is located in the centre of the city centre, the best of the best," he said. "It could offer a yield of more than 6 per cent. We are optimistic on the market outlook and the tax rates are lower than in the United States. "Although the hotel has a ground lease with only 43 years left, that is still more than the hotels in China with only 40-year land tenure. And about 70 per cent of the properties in the area are leasehold." Agents said Joint Treasure had seven partners, including the Wee family, owner of Singapore's United Overseas Bank, and David Chiu of Far East Consortium International. They said different partners were involved in different property purchases, depending on their preferences. George Nicholas, executive vice-president at property consultant Jongs Lang Lasalle's hotels and hospitality group, who was involved in the deal, said London was the most sought-after investment destination among hotel investors in Europe because of the strong and improving market fundamentals. James Innes, a partner at British consultancy Gerald Eve, said: "The new hotel room supply in London has failed to match growth in demand. Although looking ahead the pipeline for new rooms shows a steady increase of around 6,000 rooms per annum, forecasts ... show UK visitors will grow from 31 million in 2012 to over 40 million by 2020."