Barwa City enters deal with Qatari Diar Financeby Ben Roberts on Jul 11, 2010
Barwa Real Estate Company’s vehicle for its Barwa City development is to enter into a Shariah-compliant property purchase deal with Qatari Diar Finance, it was disclosed on Thursday.
The deal between Barwa City Real Estate Company and the Qatari Real Estate subsidiary will also extend to real estate projects undertaken by Barwa Financial District WLL and Barwa Commercial Avenue Company WLL, providing capital and discharging liabilities previously incurred in connection with those projects, according to Ghanim Al Saad, Barwa Real Estate Company chairman and managing director and Qatari Diar Real Estate Investment company managing director.
The terms of the deal follow murabaha principles, in which the borrower pays 20% of capital as down payment before the lender, in this case Qatari Diar Finance, buys the relevant land or property and sells it to the borrower at a high price. The higher price is determined by original price, repayment period, and down payment. The system thus avoids non-compliant interest payments.
Barwa City is a US$ 1.35 billion, 2.7 million metre2 development in Musameer, outside Doha. It will comprise of 128 apartment buildings, 6000 flats, and 1024 studio units along with schools, a hospital, mosques, parks, shopping complexes, health facilities and other amenities.
Two weeks ago Barwa Real Estate awarded a QR676 million contract to the Qatari arm of Indian contractor Shapoorji Pallonji to build the Phase 1Amenities, a contract that will include the construction of 13 buildings.
Ghanim Al Saad was unavailable for further comment.
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