Wednesday, Nov 15, 2006

(Updates an earlier item published at 1035 GMT with additional background information.)

DUBAI (Zawya Dow Jones)--Dubai World's investment in Cape Town's $2 billion Victoria & Alfred Waterfront project in South Africa will come out of Istithmar's resources, Dubai World's investment arm, Dubai World chairman Sultan Ahmed Bin Sulayem said Wednesday.

"Nakheel's recently launched $2.5 billion sukuk will finance Nakheel's projects, and financing for the Cape Town project will come out of Istithmar's pocket," Sulayem told reporters on the sidelines of a Dubai World press conference.

"A total of 50% of the $1 billion spent to acquire the project was raised by Istithmar and the remaining was raised by the London and Regional Properties Consortium," said James Wilson, chief executive of Nakheel Hotels & Resort. "The same ratio will be followed for the remaining $1 billion to develop the project."

The consortium, a joint venture between Istithmar, London & Regional Properties and a group of South African investors, won the $1 billion bid for the V&A Waterfront project in September.

In October, the consortium said it would invest another $1 billion to develop the project in stages to be completed before 2010 FIFA World Cup.

"We are concentrating now on following the 2010 deadline to deliver what is required before the start of football tournament," Sulayem said.

When completed, the project will have hotels and resorts, yacht club, cruise ship terminal, marinas and residential and commercial facilities.

When asked about Dubai World's bid to start investment in a financial services company in South Africa, Sulayem said it is important for the company.

"It important to have a financing services company when you are developing a real estate project," he said.

Sulayem said Dubai World is looking at various investments options in South Africa's real estate sector.

Wilson said Nakheel Hotel & Resorts is also looking at other investment opportunities in Africa's real estate sector in markets such as Tanzania Mozambique and Kenya.

"We are looking at real estate, tourism and mixed used projects," he said.

-By Sarmad Khan, Dow Jones Newswires; +971 4 228 0758; sarmad.khan@dowjones.com

Copyright (c) 2006 Dow Jones & Company, Inc.

(END) Dow Jones Newswires

11-15-06 0827ET