Qatar has agreed to buy one of London's most famous hotels, the Grosvenor House, as energy revenue enables the wealthy Gulf state to go on a buying spree despite a blockade by its neighbors.

A source with knowledge of the deal said the acquisition of Grosvenor House - located on Park Lane in London's swanky Mayfair district - had been agreed on Tuesday with the vendor, private U.S. real estate investment firm Ashkenazy Acquisition Corp. The price was not disclosed.

Ashkenazy Acquisition did not respond to a request for comment and nor did the Qatar Investment Authority, which is buying the hotel via its Katara Hospitality holding.

Qatar has already bought of one of New York’s most iconic buildings, the Plaza Hotel, for around $600 million.

"There is another hotel acquisition in the works in Europe coming soon as well," the source said.

Qatar has been buying top hotels and luxury properties in the West over the past decade as part of a drive by its $300 billion-plus sovereign wealth fund to diversify the wealth it accumulates from gas and oil exports. (read more)