One of Birmingham's best-known hotels is to undergo a £2.7 million renovation programme after it was bought by a Middle East investment group for nearly £40 million.

Hyatt Regency, in Broad Street, has been sold by an affiliate of the global hotel brand to an affiliate of Sharjah-based Bin Otaiba Investment Group for £38.6 million.

The purchaser plans to spend approximately £2.7 million over the next three years improving the four-star venue which is popular with delegates attending events at the ICC and politicians and important dignitaries because of its secure bridge connecting the hotel the conference centre.

The 24-storey hotel also counts Symphony Hall, The Rep theatre and Library of Birmingham among its neighbours.

As part of the sale, a Hyatt affiliate has entered into a management agreement with the purchaser and the hotel will retain its Hyatt Regency branding.

Steve Haggerty, Hyatt's global head of capital strategy, franchising and select service, said: "We are delighted to work with Bin Otaiba as we continue growing through our asset recycling strategy.

"This transaction allows us to retain brand presence in the market and expand our relationship with an owner who is investing in the Hyatt Regency brand."

Michael Marfurt, from CBRE Hotels which acted for Hyatt on the sale, added: "This transaction confirms the growing interest from Middle Eastern capital for acquiring hotels and demonstrates the confidence in the strength of the UK regional market and city centre locations in particular."