Qatar project developer considers new financing

The developer behind one of Qatar's flagship construction projects, Msheireb Downtown, is considering seeking financing in 2013 for part of the $5.5 billion development.

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The developer behind one of Qatar's flagship construction projects is considering seeking financing next year for part of the US$5.5 billion (Dh20.2bn) development.

Msheireb Properties, a unit of the Qatar Foundation for Education, Science and Community, is redeveloping a 31-hectare site in the downtown area of Doha and will seek new funding to complete the project, which is designed around green and sustainable concepts.

"So far, cash is not an issue for us," said Issa Al Mohannadi, the chief executive of Msheireb Properties. "But to be a sustainable developer, we are gearing up toward 2013 to be ready for any scenario.

"We will continue getting equity from our shareholder [the Qatar Foundation] or if we decide to go outside for financing we are getting ready for that kind of milestone."

Msheireb Downtown is a major development for Doha, regenerating one of the oldest parts of the city with commercial offices, residential homes, a school, a mall, shops and four hotels.

It is being built in four phases. Phase one is expected to be completed by the end of this year, with all four phases due for completion by 2016.

Mr Al Mohannadi did not disclose what level of funding was required next year to finish the project, but the overall cost is estimated at 20 billion Qatari rials (Dh20.17bn).

The first phase is split into three parts, with the initial contract, worth 1.56bn rials, awarded last year to a joint venture between Hyundai Engineering & Construction and HBK Contracting.

The second construction contract in the first phase, worth 2.37bn rials, was recently awarded to Carillion and Qatar Building Company.

"We are meeting our requirements now," said Mr Al Mohannadi.

"Should the shareholder continue to fund the project through equity, it's an option. We are ready for any other scenarios, but I cannot disclose the strategy for financing."

The Qatar Foundation was established in 1995 with the goal of further building Qataris into an educated and resourceful population. Msheireb Properties was set up as a property company to develop the downtown area of Doha.

"We are a commercially driven organisation, stand alone as a subsidiary of Qatar Foundation, and the whole idea of this project and others is to support the foundation long term and sustain their initiatives," said Mr Al Mohannadi. "Qatar Foundation stands for science and education and community development. For that you need to find ways to support the community at large."

He said the project would abide by laws prohibiting the sale of alcohol such as those brought in by Qatar in one other of its major projects, The Pearl.

"All I know is that the hotels operating in the development will follow the local laws for alcohol. They will have to obey that local law. I'm not sure if this is going to expand or not as a strategy for the country," he said.

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