Qatari property company Barwa Real Estate has bought one of the largest development projects in London from previous owner Land Securities.
In addition to the ?250 million for the transfer of ownership, Barwa will also pay a share of the profits within 12 months of the project?s completion in 2012.
The current estimate of the profit share, based upon office and retail rental value growth expectations, is around ?33 million. The Park House development on Oxford Street in London is the first major investment that Barwa will make in the UK.
The managing director and chaiman of the company, Ghanim bin Saad Al Saad said: ?The investment demonstrates our commitment to Europe as part of our growth strategy and signals our interest in strengthening our portfolio interests in London.?
The Economic Times reported that the development?s total space comprises 330,000 square feet. Of this, 163,000 square feet is reserved for office space, with 88,000 square feet for retail space and 70,000 square feet residential accommodation.
The managing director of the London portfolio for Land Securities, Robert Noel, said that the sale?s proceeds would be applied towards the company?s speculative development pipeline. The company will benefit from the sale, as the majority of its profit will be realised with reduced risk and no capital.
Barwa is also in the process of acquiring Qatar Real Estate Investment Co. The property unit of the sovereign wealth fund Qatari Diar owns 45 per cent of the company, and is estimated to become a significant property investment force in the UK in the near future.
