Peninsula is owned by Asian group Hongkong and Shanghai Hotels (HSH), which has confirmed it is planning a hotel on Grosvenor Place in the capital, opposite the gardens of Buckingham Palace.

The project was rumoured last month, but an official statement said today that HSH is in the process of acquiring Derwent London’s 50% leasehold interest in the capital site for £132.5 million.

The proposed project is an SW1 postcode at 1-5 Grosvenor Place and will be a joint venture partnership with Grosvenor Britain & Ireland, which manages assets worth £4.8 billion, including 300 acres of Mayfair and Belgravia.

HSH said it will now work with Grosvenor to design and submit a planning application to develop the site following “an extensive consultation phase with the local community”.

No date was given for the projected opening of Peninsula London nor any detail of its size, but it will be part of a mixed-use development.

The group still plans to open its first European hotel this year in Paris and has hotels in Hong Kong, Shanghai, Beijing, New York, Chicago, Beverly Hills, Tokyo, Bangkok and Manila. Peninsula is also planning a hotel in Burma.

Managing director and chief executive of HSH Clement K.M. Kwok said: “London is one of the world’s most important financial centres and a key international gateway city for business tourism. This project is consistent with our group’s long term strategy, representing our desire to further expand in Europe.”

The Peninsula Paris is due to open this year after a protracted renovation of a building in the French capital.

HSH has a 20% share in the Paris building, with the remaining 80% owned by Katara Hospitality. Due to additional unforeseen work on the project, the hotel construction budget has rocketed up to €338 million.