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Calgary Canadian Pacific Ltd. said Tuesday it is selling off a pair of landmark Canadian hotels for $305-million.

CP's hotel and resort unit said it has signed a deal with Legacy Hotels Real Estate Investment Trust to buy Le Chateau Frontenac in Quebec City and Victoria, B.C.'s The Empress hotel.

Legacy will pay $185-million for the 607-room Quebec hotel and $120-million for the Victoria property, which was built in 1908 and has 472 rooms.

"With the sale of The Empress and Le Chateau Frontenac to the Legacy REIT, we are able to realize the value of some of our real estate assets while maintaining long-term management contracts at these premier properties," David O'Brien, CP's president and chief executive, said.

"Over the past three years, we have significantly expanded our hotel business and will continue to look at opportunities to grow both within North America and internationally."

CP has owned the two hotels since they were built. Both are managed by luxury hotel management firm Fairmont Hotels and Resorts, of which CP controls 67 per cent.

Under Tuesday's deal, the two hotels will be acquired by a Legacy subsidiary, which will issue exchangeable shares to Canadian Pacific Hotel and Resorts Inc. worth about $120-million. The balance of the purchase price will be paid in cash.

The sale is expected to close in December.

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