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Wednesday, 13 February 2008

Shariah-compliant fund raises $600mn in Qatar


UNITED Development Company (UDC) has completed the fundraising for the first fully Shariah-compliant closed-ended $600mn real estate development fund in Qatar. The fund raised $600mn in debt and equity on a matching basis which will be used for Shariah-compliant investments exclusively in Qanat Quartier, a residential and retail development at The Pearl Qatar.
Commercialbank is the fund manager while Cb, National Bank of Abu Dhabi, QIB and Standard Chartered Bank are the joint mandated lead arrangers for the financing. QIB is acting as investment agent.
Morgan Stanley and Clifford Chance advised on the structuring of the fund and debt documentation. Morgan Stanley acted as the exclusive placement agent for the equity fund.
Qanat Quartier is strategically located on The Pearl Qatar, a man-made island 350m off the shore of Doha. The Pearl has been created by UDC through land reclamation.
“On this island, a residential community is being developed, consisting of beachfront villas, town homes, luxury apartments, penthouses, luxury hotels, marinas and schools with related infrastructure and community facilities,â€‌ UDC said.
The Pearl Qatar will eventually house more than 41,000 residents in an up-scale, multi-cultural residential community.
Qanat Quartier is one of the most upscale residential and retail developments on The Pearl Qatar and will enjoy a unique position on the island. It is located in the north-western section of the Pearl and comprises approximately 200,000sqm of reclaimed land, 5% of the island total land area.
The total built-up area of Qanat Quartier amounts to 480,000sq m, or 8% of The Pearl Qatar.
Qanat Quartier will be a luxuriously landscaped area whose residents will enjoy a true Riviera lifestyle in beautiful town houses with lush private gardens and apartment buildings around landscaped areas and Venetian style piazzas and canals. It will epitomise old world elegance, luxury and tranquility within the modern setting of The Pearl Qatar,‌ UDC said.
UDC managing director and president Khalil B Sholy said: We are very much satisfied with this extremely successful outcome. The interest from institutional and private investors has well exceeded our expectations and we have received more subscriptions than we could accommodate.
We are very happy and proud to have the Kuwait Investment Authority and other leading regional government investment bodies amongst our lead investors.
We are confident those far-sighted investors who have committed themselves early to this prestigious and ground-breaking development will fully enjoy the dynamics of Qatar's most exciting property market.
The market has clearly moved ahead of the business plan since we started to market the fund so we expect the project to be indeed very attractive for our investors.‌
Salman al-Mohannadi, Commercialbank deputy chief corporate banking officer and head of International and public sector banking, said: “This fund certainly is a milestone for the Qatari financial community. It is the first real estate private equity fund of this size and scope in Qatar.
It is fully Shariah-compliant and documents very clearly the strong demand from sophisticated international investors for a Qatari private equity product.
A key takeaway from this successful fundraising is that investors now naturally request a Middle East investment product to be in compliance with Shariah.
Its ground-breaking Shariah-compliant structure permits unmatched flexibility for the fund and will contribute significantly to maximise investor returns.‌
Jean Marc Riegel, QIB general manager (Investment Banking and Development Group), said: QIB is delighted to be part of the first Shariah-compliant financing for UDC.
On top of the financing, QIB will also play an active role being the investment agent of the facility. QIB holds the biggest participation with 1/3 of the debt facility and this fits totally with our strategy and commitment to finance leading Qatari companies.‌
The fund's sponsor, UDC is responsible for the execution of the business plan and acts as the fund's development manager as well.
UDC board member Omar Alfardan, Morgan Stanley managing director Richard Stockton, Commercialbank deputy CEO Michael Azmi-Loe, Commercialbank executive general manager Azza Fotouh, James Hopkinson and Thomas Aaaker from Standard Chartered, UDC executive vice-president (Finance) Abdullah Araj and Rola Abu Manneh from National Bank of Abu Dhabi were among those attending the presentation. --(GulfTimes)

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