X FACTOR impresario Simon Cowell has bought a stake in the 170-bedroom Royal York Hotel.

So has Manchester United manager Sir Alex Ferguson and various other celebrities, including journalist Sir David Frost, footballers Ryan Giggs and Frank Lampard as well as Irish pop group The Corrs.

All are investors in Alternative Asset Investment Management (AAIM), which has acquired six hotels managed by Harrogate-based Principal Hotels Group for £290 million, including York's most famous four-star hotel in Station Parade.

It is a 25-year "sale and leaseback" arrangement, in which the buildings have been sold to AAIM while Principal Hotels leases them. It is the second time in four months that ownership of Royal York Hotel has changed hands.

First Permira bought the chain from the Royal Bank of Scotland in September in its own sale and leaseback arrangement with Principal Hotels.

Now Permira has sold the hotel as part of a portfolio which also includes The George in Edinburgh, The Met in Leeds, The Russell in London, The Palace in Manchester and Seldon Park in Croyden.

A spokeswoman for Principal Hotels said: "We operated a sale and leaseback arrangement with the Royal Bank of Scotland and Permira acquired the group with our hotel team in place."

The arrangement means Tony Furlong, the Royal York Hotel's manager, remains in post and the final finishing touches of a £7.5 million revamp programme continue. Already completed is an upgrade of bedrooms, all the Victorian premises' public areas and the construction of a leisure suite.

Over the next month the kitchens are to be upgraded.

The purchase was carried out using the Symmetry fund joint venture set up by AAIM with the Bank of Scotland in October to spend £2 billion on European property. It follows AAIM's acquisition of regional hotel chain Menzies for £190 million in October.

The company is said to have netted its famous investors a fortune since it was launched in 2003, with refinancing earning them three times their stake.