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Wed 13 Feb 2008 02:24 AM

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Qatar raises $2.5bn for Chelsea Barracks

State investment firm agrees Islamic loan to finance acquisition and development of the London Landmark.

State-owned Qatari Diar Real Estate & Investment is preparing to raise $2.5 billion in a syndicated Islamic loan to help finance its purchase of the Chelsea Barracks in London, three bankers said.

Qatari Diar, owned by the Qatar Investment Authority, last month bought the London property from Britain's Ministry of Defence for 959 million pounds ($1.87 billion).

The former military camp, built in the 1960s, is to be demolished and replaced with luxury housing in the UK’s most expensive home property deal ever.

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 3.5-year loan complies with Islam's ban on lending interest and is structured as an Ijara, or lease agreement, three bankers with direct knowledge of the transaction told Reuters on condition of anonymity.

Qatari Islamic lender Masraf al-Rayan, BNP Paribas, Qatar National Bank, Calyon and HSBC have underwritten the loan, which will be open for general syndication by the end of February, they said.

Qatari Diar would use the funds to pay for the Chelsea Barracks acquisition and to cover development costs, the bankers added.

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