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Fri 5 Mar 2010 08:38 AM

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Qatar, Barwa in talks over $2bn project - report

Barwa also negotiating sale of iBarwa Financial District to state-owned Qatar Petroleum.

Qatar's Barwa Real Estate is in talks over the possible takeover of its Barwa City project, worth about $2 billion, by a government body, the company's general manager was on Thursday quoted as saying.

The move appeared to be part of efforts by Qatar, the world's largest liquefied natural gas exporter, to help its property firms weather the storm of the global crisis.

"At this point I can tell you that it is a Qatar-based organisation and is a government entity," Khalid Al Nasr was quoted as saying by Qatar's Gulf Times newspaper.

Phase one of Barwa City, estimated at $2 billion, would be completed in June 2011 and would house approximately 25,000 residents, al Nasr said in January. The contractor for Phase One the project is Germany's Bilfinger Berger.

Nasr said that, if negotiations are successful, Barwa will hand over the project in phases as they are completed, the newspaper said.

An executive at Barwa declined to comment.

The Gulf Arab state has pushed through defensive mergers and used the real estate arm of the country's sovereign wealth fund to support developers.

Analysts say Qatar's robust financial position was likely to prevent a property crisis like that suffered by neighbouring Dubai, but some fear problems due to excess supply.

"The story here is a growing population, and you need buildings to house them. But the supply coming on (is too much) - it's very difficult to see how it will be filled," said a senior banker in Doha who declined to be named.

"They won't have a property crisis (in Qatar), but they will have unoccupied buildings. But at least every building will get finished, and the banks will be paid," he said.

Government intervention in Qatar "will delay and soften the blow. If there is a nasty outcome in Dubai, it will be less nasty here."

Barwa is also negotiating the sale of its Barwa Financial District to state-owned Qatar Petroleum.

Barwa - which has properties in Paris, Switzerland and the United Kingdom - was told by the government in January to merge with Qatar Real Estate Company (Alaqaria). (Reuters)

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