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Mon 12 May 2008 04:56 PM

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Al-Futtaim raises $500mn to fund property drive

Dubai-based group will use funds for $9bn Cairo project as well as future developments.

Dubai-based Al-Futtaim Group said it raised $500 million from investors for a fund to develop real estate projects in the Middle East and North Africa, including Egypt.

Al-Futtaim Capital, a unit of family owned Al-Futtaim Group, attracted investors from Asia and the Gulf, including sovereign wealth funds, the unit's Managing Director Marwan Shehadeh told reporters in Dubai on Monday, declining to identify co-investors.

Some of the funds will go towards the $9 billion Festival City - a residential and commercial project - Al-Futtaim is developing in Cairo, Shehadeh said.

RELATED: Al-Futtaim launches $3.6bn Egypt project

The group is also in advanced talks to develop projects in Doha and Abu Dhabi, and at an early stage for opportunities in Saudi Arabia, Tripoli and Casablanca, Shehadeh said declining to give a timeframe.

"The markets we targeted are in their infancy... it is the right time and not the end of the cycle," Shehadeh said.

In Dubai, Al-Futtaim - with businesses from autos to financial services - is building a 526 hectare Festival City development, with shops, offices, apartments and hotels, at a cost of $12 billion.

A third of the fund, for which Al-Futtaim may seek another $200 million, complies with an Islamic ban on interest.

"We have seen increased interest from US and Europe and may increase the fund to $700 million by year-end," Shehadeh said. (Reuters)