Sol Meliá has bought the City Bank building in London's Holborn district and is to convert it into the UK's first ME by Melia hotel.

The €133m (£115m) acquisition - from Anida, a subsidiary of BBVA bank - will see the 10-storey structure redesigned by British architect Norman Foster to offer 173 rooms in four different categories. Finalising its construction and fitting out will cost a further €52m (£45m). The ME London, close to both Covent Garden and Trafalgar Square, is expected to open in 2012 and will join the company's Meliá White House, situated next to Regent’s Park. The hotel's facilities are to include a convention centre, two destination restaurants and bars.

Sol Meliá vice chair and CEO, Gabriel Escarrer Jaume, said: "This deal brings the addition of a strategic asset in a key destination, and also positions the brand in one of the most important feeder markets in the world travel industry." The ME by Meliá brand currently includes two hotels in Spain - the ME Madrid and ME Barcelona - and two in Mexico - the ME Cancun and ME Cabo. A further hotel, the ME Vienna, will occupy 22 floors of the city's DC Tower 1, scheduled for completion in 2013 and what will become Vienna's tallest building.