A subsidiary of Abu Dhabi-based retail chain Lulu Group International has acquired Great Scotland Yard in London for £110m ($171m). The hospitality arm of Lulu, Twenty14 Holdings, intends to redevelop the historic property as a 92,000 square-foot five-star hotel.

The local Galliard Homes, the seller, has already begun converting the property into a 235-room hotel. The developer is thought to have retained a 125-year lease on the building. Construction is already 30 per cent complete. Interior fit-out work is scheduled to begin in March 2016. A neighbouring grade two-listed Victorian townhouse will be converted into an entertaining suite.

Germany’s Steigenberger Hotel Group will operate the hotel, which is expected to open in early 2017. Lulu is also planning a hotel in Dubai operated by Steigenberger. The five-star hotel in Business Bay will have 365 rooms, restaurants, fitness facilities and conference rooms. It is due to open in late 2015.

Another Abu Dhabi group, Abu Dhabi Financial Group, purchased New Scotland Yard, the headquarters of London’s Metropolitan Police Service, in late 2014 for $188m. It plans to redevelop the site as a luxury real estate complex.

GCC investors have historically favoured London property as a long-term, low-risk investment. Recent investments include UAE developer Damac’s planned 50-storey tower and Qatar Investment Authority’s $4bn acquisition of the Canary Wharf financial district.