A HONG Kong hotel group is poised to make its first foray into the UK after agreeing to buy a half stake in a site on Hyde Park Corner for £132.5m

Peninsula Hotels said yesterday it will buy Derwent London’s 50 per cent interest in 1-5 Grosvenor Place, forming a new joint venture with the freeholder Grosvenor.

The pair plan to develop the 1960s Belgravia office block, which spans 1.5 acres, into a luxury hotel and residential scheme.

Derwent, which has owned the building for almost 20 years, sold half of its share and formed a joint venture with Grosvenor last year, to create a mixed-use luxury scheme.

Chief executive John Burns said Derwent decided to sell out after it became clear the building was better suited to a hotel project.

“We didn’t wish to be in the hotel business and so we took the opportunity to realise profits now,” he told City A.M.

Once the deal is completed, Derwent will have pocketed nearly £200m of proceeds from the scheme since the start of 2012. Peninsula has nine hotels in Asia and the US and is due to open its first European venture in Paris this year.