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The Meydan Group has tapped a $476 million (Dh1.73 billion) financing from Qatar’s QNB and its UAE subsidiary Commercial Bank International (CBI), in what is one of the largest local real estate focussed bank fundings in the year to date. The tenor of the loan is in excess of seven years, according to a top Meydan official.
The rate of interest has not been revealed, though the official added that one of the reasons to close the deal now was to secure the “best possible terms in still challenging times”. The funds will be used to develop the infrastructure works at Meydan City, for clusters such as encompassing the race course villa plots and the gated community, which is being built by sub-developers such as MAG Group and G&Co. The first tranche of QNB funds will start being drawn upon immediately for the project.
In a statement, Saeed Humaid Al Tayer, Chairman and CEO of Meydan, said: “Meydan’s goals are in direct synergy with those of QNB — to encourage growth and further alliances across the GCC.”
In fact, this is the second major financing that the Dubai based developer has struck with QNB. In 2014-14, it entered one for Dh700 million, which was used to build 1,500 villas for Emirates Group pilots and senior management. It was one of the first local real estate financing deals on a “revolving credit basis”, “where the funds can be used on a need-to basis and allowed us to save on the interest payments,” said Meghnad Warrier, Vice-President — Finance at Meydan Group. “Of the 1,500 Emirates villas, 500 have been delivered and the rest will be by early 2017.
“For the current facility, there’s no revolving credit arrangement... it’s a straight-forward one. The longer tenor will be of great help because, typically, the sweet spot in the local market for such bank financing tends to be around five years.
“QNB, which is the largest bank in the region (assets of 5.39 billion Qatari riyals; Dh5.43 billion), is very selective about the deals it strikes in the UAE. To be able to do so twice with them in three years shows the worth of what Meydan is creating.”
Apart from the existing projects at Meydan City, the developer is also associated in the 2.9-kilometre long Dubai Water Canal, through a joint venture with Meraas. The first plots bordering the Canal were recently acquired by a private developer and which has since been launched into the market. The Canal stretch is fast emerging as one of the priciest in the city, with plots going for upwards of Dh300 a square foot.
The other Meydan mega venture is the Meydan One master-development, which will include a mall. The project is in its “internal design phase now”.
A third project on its books is a signature high-rise on Shaikh Zayed Road.
Source: Manoj Nair, Associate Editor, gulfnews.com