DLA Piper today announces its involvement in the financing of Doha Festival City, one of the largest multi-use developments in Qatar with a total project value of around 6 billion Qatari Riyals (QAR). The project is being developed by its owners, Bawabat Al Shamal Real Estate Company WLL (BASREC), and as a ‘super-regional retail and entertainment destination’ boasts the first IKEA store in Qatar, and will feature an entertainment and leisure complex, automotive showrooms and international hotels and convention centre.
DLA Piper Middle East acted through its offices in Doha, Dubai and Abu Dhabi to advise BASREC and provided specialist Islamic finance, development financing, corporate and local real estate advice.
Doha Festival City is owned and being developed by BASREC, which was formed by investors from Al Futtaim Real Estate Services, Qatar Islamic Bank, Aqar Real Estate Development And Investment and a private Qatari investor. The complex is being constructed on a 433,847sqm plot which will include 260,000sqm gross leasable area of retail space offering over 500 retail units which will include a large number of new brands to Qatar.
“Doha Festival City will be one of the most innovative and impressive multi-use projects within easy reach of downtown Doha and, when completed, will have a huge impact on the city itself,” commented Catherine McDougall, senior legal consultant, DLA Piper Middle East. “Developments of this scale and complexity require advisers that have a deep sector and local knowledge in order to predict, and overcome, any challenges and we are delighted to advise BASREC on this landmark transaction.”
The financing package totals QAR 3.7 billion, is the largest private sector financing in Qatar and is structured on a co-financing basis with an Islamic facility (based upon istisna’a / ijara) and a commercial facility. The Commercial Bank of Qatar, Doha Bank, Ahli Bank, Al Khalij Commercial Bank (al khaliji), International Bank of Qatar and Qatar National Bank will fund the commercial facility, with Barwa Bank and Qatar International Islamic Bank on the Islamic facility. QInvest acted as financial advisor and bookrunner with The Commercial Bank of Qatar and Barwa Bank as mandated lead arrangers.
The development is located just north of downtown Doha on Al Shamal Road, one of the main arterial routes to the city centre, and the route that will eventually connect Doha with Bahrain via the Qatar-Bahrain Causeway. With its strategic positioning, the super-regional complex is ideally equipped to meet the retail, hospitality and entertainment needs of not only Qatar, but also of neighbouring countries.
The first phase, the 32,000 sqm IKEA store, is due for completion in Q1 2013, while the remaining components of Doha Festival City will be delivered in 2015.
The DLA Piper Middle East team was co-ordinated by Catherine McDougall (senior legal consultant who led the team advising on the commercial terms of the financing) and Paul McViety (legal director who led the team advising on the Islamic and intercreditor aspects of the financing). The wider team included Tom O’Grady (Office Managing Partner, Doha), Brenda Hill, Andre Saade, Tala-Sarah Eavis and Jenna Darler.
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