Doha Festival City CEO denies $1bln refinancing has been "frozen"

Media report claimed the refinancing has been postponed as a result of the rift between Qatar and its neighbours

Stores are seen inside Doha Festival City mall in Doha, Qatar, July 13, 2017.

Stores are seen inside Doha Festival City mall in Doha, Qatar, July 13, 2017.

17 July 2017

The owner of Doha Festival City, a retail and hospitality complex in the Qatari capital, has refuted claims it's refinancing of a $1 billion loan has not been “frozen” as a result of the ongoing diplomatic rift between the Gulf state and its neighbours.

The refinancing, coordinated by Doha-based investment bank QInvest, was marketed earlier this year to both Qatari and regional banks, including institutions in the United Arab Emirates.

The UAE, along with Saudi Arabia, Bahrain and Egypt, cut diplomatic and transport ties with Qatar on June 5, accusing it of supporting terrorism.

Banking sources told Reuters the proposed deal had been postponed, claiming the ongoing rift between the Gulf neighbours had reduced appetite for the transaction, according to a report on Sunday.

However, Bawabat Al-Shamal Real Estate Co. WLL (BASREC), owner of the Doha Festival City project, issued a statement denying the claims and said talks with lenders was still ongoing.

“Contrary to recent reports, Doha Festival City’s “re-financing” has not been frozen. The project owner, Bawabat Al-Shamal Real Estate Co. WLL (BASREC) has, for the last year, been in discussion with banks regarding the financing,” BASREC CEO, Kareem Shamma, said in a statement emailed to Thomson Reuters Projects late on Sunday.

“Decisions upon the direction of the financing were taken prior to the start of the current diplomatic situation.  As such, the events of June 5 2017, did not impact the financing of the Doha Festival City project which continues to enjoy a healthy relationship with all the Banks it has been dealing with since the start of the development,” he added.

Doha Festival City is part of a joint venture between Dubai-based Al-Futtaim Real Estate Services, Qatar Islamic Bank, Aqar Real Estate Investment Co and a private Qatari investor.

It is the first retail mall in Qatar for Dubai-based Al-Futtaim, who is also the developer behind Dubai Festival City and Cairo Festival City.

Doha Festival City is a 6 billion Qatari riyal ($1.63 billion) mixed-use retail and hospitality development featuring a gross building area of 433,000 square metres, and a gross leasable area of 244,000 sqm, which includes the biggest mall in Qatar and one of the largest entertainment and retail developments in the Gulf.

The Doha Festival City mall opened last April after a long delay, which the owners attributed to issues with supporting infrastructure. Many of the mall's stores have not yet opened to the public.

The project also includes a five-star hotel and convention centre, which is expected to break ground in 2017, opening in early 2019.

© Zawya Projects News 2017

More From Financial Services