United Development Company (“UDC”), one of the leading public shareholding companies in Qatar has completed the fundraising for the first fully Shari’a compliant closed-ended real estate development fund (the “Fund”) in the state of Qatar.
The Fund has raised a total of $600 million of equity committments and committed financing, which will be used to invest in a Shari’a compliant manner exclusively in the Qanat Quartier development (“Qanat Quartier”), a residential and retail development project in Doha, Qatar. Qanat Quartier is part of The Pearl Qatar (the “Pearl”). Commercial Bank of Qatar (“CBQ”) acts as the fund manager and CBQ, National Bank of Abu Dhabi (NBAD), Qatar Islamic Bank (QIB) and Standard Chartered Bank (SCB) are the joint mandated lead arrangers for the financing. QIB will act as Investment Agent for the shari’a compliant financing.
Qanat Quartier is strategically located on the Pearl, a man made island 350 metres offshore of Doha. The Pearl has been created by UDC through reclamation of 4.1 MM sqm of land in the Arabian Gulf. On this island a residential community with a total of 5.9 MM sqm of built-up area is being developed, consisting of beachfront villas, town homes, luxury apartments, penthouses, luxury hotels, marinas and schools with related infrastructure and community facilities. It is envisaged that the Pearl will eventually house more than 41,000 residents in an up-scale, multi-cultural residential community; a true “island retreat” in the heart of Qatar.
Qanat Quartier is one of the most upscale residential and retail developments on the Pearl and will enjoy a unique position on the island. It is located in the north-western section of the Pearl and comprises approximately 200,000 sqm of reclaimed land, 5% of the island total land area. The total built-up area of Qanat Quartier amounts to ca. 480,000 sqm, or 8% of the Pearl.
Qanat Quartier will be a luxuriously landscaped area edged by sandy bays and the warm Arabian Gulf. 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 epitomize old world elegance, luxury and tranquillity within the modern setting of the Pearl. All residential units will be close to the water with direct views over the beach. Luxury shops and boutiques, a luxury hotel and a beach club with marina complete this exclusive quarter.
Khalil B. Sholy, Managing Director and President of United Development Company: “We are very satisfied with this extremely successful outcome. The interest from institutional and private investors has well exceeded our expecations 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 that 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 Mohannadi, Deputy Chief Corporate Banking Officer & Head of International & Public Sector Banking of Commercial Bank of Qatar: “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 Shari’a 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 Shari’a. We and the joint mandated lead arrangers viz NBAD, QIB and SCB are also very proud of the innovative financing solutions for the Fund. Its ground-breaking Shari’a compliant structure permits unmatched flexibility for the Fund and will contribute significantly to maximise investor returns.”
Jean Marc Riegel, General Manager Investment Banking and Development group said on this occasion “QIB is delighted to be part of the first Sharia 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
United Development Company, the Fund’s sponsor, is responsible for the execution of the business plan and acts as development manager for the Fund. UDC was established by eminent members of the Qatari business community in 1999 as a real estate development and investment company with the aim of establishing, managing and growing a diversified portfolio of businesses in Qatar and abroad. It has since become one of the leading public shareholding companies in the State of Qatar, and has been listed on the Doha Securities Market since June 2003. UDC has unparalleled experience in residential developments in Doha, being the master developer of the Pearl.
Morgan Stanley and Clifford Chance advised on the structuring of the Fund and the debt documentation. Morgan Stanley acted as the exclusive placement agent for the equity fund.
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