The owner of the Fairmont Hamilton Princess and Fairmont Southampton hotels has entered a European luxury hotel joint venture with Kingdom Hotels International and Bank of Scotland.

The joint venture has a potential buying capacity of $1.5 billion US, funded 50 per cent by Bank of Scotland, 25 per cent by Fairmont and 25 per cent by Kingdom.

Toronto-based Fairmont Hotels & Resorts Inc., which will mange the hotels acquired by the group, expects to contribute up to $390 million towards the investments focused on key European markets. Bank of Scotland will provide debt financing. Cedar Capital Partners will be the investment adviser.

The 619 room Monte Carlo Grand hotel on the Cote d'Azur in Monaco is the group's first acquisition. The 619-room landmark property will be called The Fairmont Monte Carlo and the new owners plan to invest $50 million US in refurbishment.

Fairmont CEO William Fatt said the venture "marks another important milestone in the global expansion of the Fairmont brand," coming on the heels of an agreement to manage London's Savoy Hotel.