Moscow on Thursday sold off for $277 million its landmark Hotel Metropol near the Kremlin, an iconic Art Nouveau building where Lenin once gave speeches and stars like Michael Jackson have stayed.
Starting at 8.7 billion rubles ($270 million), the auction rapidly ended after just two bids with the winner being a Russian subsidiary of the current operator, which is linked to the country's largest hotel chain.
No international chains were among the three participants in the auction.
The winner, a company called Okhotny Ryad Deluxe, is a subsidiary of the current operator of the five-star hotel, spokeswoman for Moscow's property department Oksana Vaghina told AFP.
The operating company, also called Metropol, is controlled by the chairman of the board of Azimut Hotels, Russia's largest hotel chain, Alexander Klyanchin, the Interfax news agency said.
General director of Metropol Yevgeny Ustenko told journalists he would ensure that the establishment, just a short walk from the Red Square, was "the best hotel in Moscow".
Asked whether the hotel would become part of the Azimut chain, which specialises in business travellers, he said, "I can't tell you yet, probably not."
The high-end auction was part of a drive to privatise thousands of publicly-owned non-residential properties in Moscow, which began in 2004.
Experts said the city hall sold the hotel for a good price, since the starting price was high, and that international chains would be wary of taking on such a major project in Russia at present.
"The starting price is high, appropriate to the market price," said Olga Kochetova, director of valuation services at Knight Frank in Russia.
"Probably international chains didn't take part because they aren't up to this at the moment. Considering the situation in Europe, they're afraid to buy such properties in Russia and Eastern Europe, seeing such investments as quite risky."
"The amount of investment is large, and the starting price is high. There could not have been many participants. This isn't unusual for such tenders," said Sergei Lyadov, public relations chief at City-XXI Vek property developers.
The auction sold off both the building measuring almost 40,000 square metres (430,000 square feet) and its land.
It did not include the moveable contents, which the hotel's website lists as hundreds of antiques from Meissen porcelain to hardwood furniture and paintings that still belong to the state.
One of Moscow's most ornate buildings, the hotel was designed by British architect William Walcot and completed in 1905 on the commission of one of Russia's richest entrepreneurs and patron of the arts, Savva Mamontov.
Its facade is decorated with a ceramic panel by Russian artist Mikhail Vrubel called the "Princess of Dreams" and bas-reliefs depicting the four seasons.
The Bolshevik authorities took over the hotel, then the largest in Russia, after the 1917 revolution and Lenin used to declaim to supporters from a balcony in one of the restaurants.
The hotel was managed by the Intourist travel agency during the Soviet era. It underwent a major refit of its 362 rooms in 1991, becoming the country's first five-star hotel.
Among those who stayed there were singers such as Michael Jackson and Montserrat Caballe, film stars Marlene Dietrich and Arnold Schwarzenegger and world leaders including former French president Jacques Chirac.
However the Metropol's glamour has faded lately and stars recently visiting Moscow such as singer Madonna and actor Johnny Depp have favoured another central hotel in the luxury Ritz-Carlton chain.
The Metropol's building and its interior is listed as a historic monument of national significance, meaning that the new owner must not destroy its period features in any restoration work.