UDC raises $600m in Shariah-compliant fund

(AJP - The Peninsula) United Development Company (UDC) has completed fundraising for the first fully Shariah-compliant closed-ended real estate development fund in the country. The fund has raised $600m of equity commitments and committed financing.

The Fund will be used to invest in a Shariah-compliant manner exclusively in the Qanat Quartier Development (Qanat Quartier), which is a residential and retail development project here.

Qanat Quartier is part of The Pearl Qatar project. Commercialbank will be the fund manager and is also a joint mandated lead arranger along with the National Bank of Abu Dhabi (NBAD), Qatar Islamic Bank (QIB) and Standard Chartered Bank (SCB). QIB will act as Investment Agent for the financing.

Khalil B Sholy, UDC Managing Director and President, said at press conference yesterday: Development Company: "We are very 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."

Qanat Quartier is located on the Pearl, a manmade island 350m offshore of the city and is located in the north-western section of the Pearl and comprises approximately 200,000sqm of reclaimed land, five percent of the island's total land area. The total built-up area of Qanat Quartier amounts to 480,000sqm or eight percent of the Pearl.

Salman Mohannadi, Deputy Chief Corporate Banking Officer and Head of International and Public Sector Banking of Commercialbank, 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."

Jean-Marc Riegel, General Manager, Investment Banking and Development Group, said: "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 one-third of the debt facility and this fits totally with our strategy and commitment to finance leading Qatari companies.

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.