Qataris buy jewel of Chelsea for $2bn

LUXURY HOUSING: The 12.8-acre Chelsea Barracks site will be converted into an exclusive estate rivalling Mayfair and Belgravia.

Qatar has bought a former military camp in the heart of London for 959 million British pounds ($1.88 billion), completing the UK's most expensive home property deal ever.

First announced in April last year, the deal will see Chelsea Barracks, built in the 1960s to house British armed forces, demolished and replaced with luxury housing.

Working with CPC Group, state-owned Qatari Diar Real Estate Investment Company plans to build up to 2,000 homes on the 12.8-acre site, located between Sloane Square and the River Thames.

Chelsea Barracks will be developed into what has been describe as the 21st Century equivalent of the great London estates of Mayfair and Belgravia.

Architect Lord Rogers has been commissioned to design the buildings, which will include a luxury apartment complex surrounded by its own semi-private woodland and parks.

The homes are expected to be sold to the world's wealthiest individuals, but the developers have promised a number of more affordable housing units as well.

The 959 million pounds is over three times the reserve price put on the barracks when the Ministry of Defence (MoD) put it up for sale in 2005.

The consortium exchanged contracts with the MoD in April 2006, but the deal was not completed until Thursday. Payment will be spread over five years.

The ministry said the proceeds from the sale would be spent on military accommodation.

Qatari Diar Chief Executive Nasser Al-Ansari said last year the project was very important to the company and represents its first major investment in Europe.

Qatari Diar is one of the vehicles used by the government of Qatar, which has the world's third largest gas reserves, to invest windfall revenues from energy exports.

Qatari Diar views investments in Europe as a means of balancing an asset portfolio that until now has centred on emerging markets, according to its website.

The company is the owner and developer of Qatar's $5.5 billion Lusail project, a 35-square kilometre development that will include an entertainment district modelled on London's Piccadilly Circus.

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