Largest Islamic financing arrangement on a UK property
Doha, Qatar: 02 March, 2008: Qatari Diar Real Estate Investment Company and their joint venture partners CPC Group (which together own Project Blue (Guernsey) Ltd) today announced a US$2.5 billion syndicated financing to fund Project Blue (Guernsey) Ltd's purchase of London's Chelsea Barracks, a 5.2 hectares (12.8 acres) area in the City of Westminster that is generally regarded as one of the most important development sites in Europe. In this ground breaking deal, Project Blue (Guernsey) Ltd has negotiated what is believed to be the largest Islamic financing on a UK property.
Project Blue (Guernsey) Ltd, which is majority owned by Qatari Diar, with additional investment from CPC Group, is financing the Chelsea Barracks acquisition through an aggregate USD 2,467,875,000 sale and lease (ljara) financing structure. The financing is fully underwritten by PBGL's strategic partner Masraf Al Rayan, BNP Paribas, CALYON Crédit Agricole, HSBC Amanah, and Qatar National Bank.
Though similar in most aspects to conventional banking practices, Islamic financing laws prohibit the collection and payment of interest and investing in businesses that are considered to be unlawful in the Islamic faith.
Newly appointed Chief Executive Officer of Qatari Diar Real Estate Investment Company, Mr Ghanim bin Saad al-Saad said: "We were delighted to be the majority investor in the consortium which has purchased Chelsea Barracks, and the related launch of our inaugural syndicated financing represents a major step in the advancement of what is certain to be an important development for all of London.
Qatari Diar has a reputation for creating some of the most desirable commercial and residential development projects in the world, and this project represents our first major investment in Europe. Chelsea Barracks will adhere to our commitment to creating sustainable developments that build communities and enhance the well-being of all."
Christian Candy, founder of CPC Group comments: "This is the most important redevelopment scheme in London in the last fifty years and therefore it is fitting that together we have secured this historic financing".
Project Blue (Guernsey) Ltd completed the purchase of Chelsea Barracks on 31 January 2008 for a price of £959 million, with the payment split evenly over five years.
In structuring the transaction Project Blue (Guernsey) Ltd was advised by Clifford Chance in the acquisition and financing of Chelsea Barracks and Norton Rose advised the 5 MLA's. Clifford Chance is advising Project Blue (Guernsey) Limited on all the legal aspects of the ongoing development.
Patrick Chenel, Chief Financial Officer for Qatari Diar commented, "The financial structure developed here has allowed us to deliver a truly innovative financing solution for the global real estate sector. We have broken new ground with our advisors, by creating and setting up Islamic financing of a scale not seen before in a major real estate acquisition in UK."
Chelsea Barracks Development
Proposals for the scheme, which will be subject to final planning approval by Westminster City Council, will transform the current concrete parade ground and army buildings into a sustainable mix of luxury apartments and affordable units in a green setting, close to the Thames.
To this the award-winning architect practice Rogers Stirk Harbour + Partners in conjunction with London's leading interior design house and development manager, Candy & Candy, will lead the new development project of the site.
The design brief prepared by Rogers Stirk Harbour + Partners provides 1.45 million sq. ft. of net floor area incorporating the following:
- Private residential accommodation located within a stunning, secure landscaped environment
- Seven Star Boutique luxury hotel
- Affordable housing requirement equivalent to 50% of unit numbers
- Community Areas uses in appropriate locations
- Underground car park
The new development of the site is designed to have a positive relationship with its setting and particularly within the grounds of the Royal Hospital and Ranelagh Gardens, to respect the townscape and amenity considerations of the neighboring communities.
It will also achieve a sustainable development in terms of design, construction and energy use.
-Ends-
Notes to Editors
1. Project Blue (Guernsey) Limited ("PBGL")is majority owned by Qatari Diar, with additional investment from CPC Group, a Guernsey based Development Company owned by Christian Candy. PBGL has appointed Candy & Candy as development managers and interior designers for the proposed residential scheme for the site.
2. PBGL is a Guernsey based company and joint venture between Qatari Diar Real Estate Investment Company, a 100% owned subsidiary of Qatar Investment Authority, itself owned 100% by the State of Qatar, and CPC Group Limited, a Guernsey based privately owned property trading and development company specializing in ultra-prime residential schemes in London and other major world cities.
3. Chelsea Barracks comprises an area of prime London real estate of 5.3 hectares (13.1 acres) in central London south of Sloane Square and north of the Thames River at the level of the Chelsea Bridge in the Royal Borough of Kensington and Chelsea, bordering on the western boundary of the City of Westminster.
4. The Financing of the acquisition of the Property will be made available in four installments.
5. It is the intent of the Mandated Lead Arrangers to syndicate the Financing among a broader group of relationship and potential relationship banks of Qatari Diar and the Qatar Investment Authority generally and to procure that these additional Financiers enter into the Facility Documents subsequently in accordance with the requirements of the Ijara financing structure.
6. While the Financing will benefit from security arrangements giving beneficial ownership rights over the Property to the Financiers in the event of default by the Lessee, the Financing will be fully guaranteed by Qatari Diar.
7. It is the intention to syndicate the financing among a selection of international relationship and potential relationship banks, both conventional and Islamic, of Qatari Diar and the Qatar Investment Authority.
8. To respect the Shari'a compliant nature of the Financing structure, the initial purchaser of the Land and Lessor under the Finance Documents was Masraf Al Rayan.
About Qatari Diar Real Estate Investment Company
Wholly owned by the Qatar Investment Authority, Qatari Diar Real Estate Investment Company was established in December 2004 to support Qatar's growing economy and to coordinate the country's real estate development priorities. Qatari Diar creates distinguished property developments, enhanced with local cultural and lifestyle experiences to attract tourism and new residents, generating sustainable and tangible socio-economic benefits. Qatari Diar's vision is to become one of the world's most trusted and effective real estate investment companies by creating quality, well-planned and desirable developments that enhance local communities.
For more information on Qatari Diar, please contact Martin Weekes on +974 5803413
www.qataridiar.com
About CPC Group
CPC Group is a privately owned Property Trading and Development Company based in Guernsey. The company specialises in premium residential schemes in a number of international markets with a focus predominantly in central London. CPC deliver the best and strive to be better, uncompromising in their commitment to the standards and integrity of the company.
www.cpcgroup.gg
About Candy & Candy
Candy & Candy are at the forefront of luxury interior design and development management across the globe. The company is currently appointed to work on high profile projects across the world, with five million sq ft under development management globally, including 20 acres in Central London: One Hyde Park; Chelsea Barracks; Noho Square (formerly Middlesex Hospital); 21 Chesham Place and One Kensington Park.
www.candyandcandy.com
About Clifford Chance
Clifford Chance's leading real estate practice, with over 330 partners and lawyers worldwide, offers UK, European, Asian and US real estate capability. The practice advises the real estate industry's leading players on the entire property 'life-cycle' from the initial acquisition, development, leasing, joint venturing and financing through to the final exit, as well as tax structuring, PFI/PPP, corporate outsourcing, planning, environment and litigation.
Clifford Chance is consistently ranked first in commercial property, real estate finance, hotels, development, investment, PFI, construction and real estate litigation by the UK Legal 500 Directory (2006-2007) and Chambers UK Directory (2008).
Clifford Chance is one of the world's leading law firms, helping clients achieve their goals by combining the highest global standards with local expertise. The Firm has unrivalled scale and depth of legal resources across the three key markets of the Americas, Asia and Europe and focuses on the core areas of commercial activity: capital markets; corporate and M&A; finance and banking; real estate; tax; pensions and employment; litigation and dispute resolution. Clifford Chance has 27 offices in 20 countries and 3,800 legal advisers.
Clifford Chance achieved the highest number of top tier rankings of any firm in the Chambers Global 2008 Directory, cited in 20 international tables. This independent analysis focuses on firms' legal ability, professional conduct, client service, and commercial awareness, and these rankings provide outstanding recognition for the firm's breadth of expertise and consistency of quality across global markets.
Clifford Chance won the "Best Law Firm in Islamic Finance", in The Islamic Finance News awards for 2007 and "Islamic Law Firm of the Year" in the Euromoney Awards for 2008.
www.cliffordchance.com
About Norton Rose
Norton Rose LLP is a constituent part of Norton Rose Group, a leading international legal practice offering a full business law services from offices across Europe, the Middle East and Asia.
Knowing how our clients' businesses work and understanding what drives their industries is fundamental to us. Our lawyers share industry knowledge and sector expertise across borders, enabling us to support our clients anywhere in the world. We are strong in corporate finance, financial institutions, energy and infrastructure, transport, and technology.
Norton Rose Group comprises Norton Rose LLP and its affiliates and has over 1000 lawyers operating from offices in Amsterdam, Athens, Bahrain, Bangkok, Beijing, Brussels, Dubai, Frankfurt, Hong Kong, Jakarta*, London, Milan, Moscow, Munich, Paris, Piraeus, Prague, Riyadh*, Rome, Shanghai, Singapore and Warsaw.
Norton Rose Group won the "Best Islamic Finance Law Firm" award in the Islamic Business and Finance Awards 2007.
* associate office
www.nortonrose.com
For further information on Qatari Diar please contact: Martin Weekes on +974 580 3413
For further information on CPC Group please contact: Richard Williams on +44 (0) 1481 722 111
© Press Release 2008
