London Olympic Village sold for £557 million - ODA

LONDON (Reuters) - London’s Olympic Village has been sold for 557 million pounds to a Delancey and Qatari Diar joint venture, leaving taxpayers to pay about 275 million pounds linked to the development of the site.

Cranes tower over part of the Olympic Village, being constructed for the London 2012 Olympic games, in east London, March 4, 2010. REUTERS/Andrew Winning

The deal sees the joint venture acquire homes on the Olympic Village site in Stratford, east London, and its long-term management, ODA said. It would also include arrangements to provide a future profit-share for the public sector.

On Thursday, Reuters reported Delancey and Qatari Diar had bought the Olympic Village. Qatari Diar is the property arm of Qatar’s sovereign wealth fund.

“This is a long-term project for us -- we are looking to retain the neighbourhood and create a place where people will want to live, work and play for years to come,” Delancey’s Chief Executive, Jamie Ritblat, said in the statement.

Delancey and Qatari Diar will buy 1,439 homes that will become private housing after the Olympics, plus six adjacent future development plots with the potential for a further 2,000 new homes.

The majority of the homes would be rented out rather than sold by its new owners, creating a private sector residential fund of more than 1,000 homes to be owned and directly managed as an investment, ODA said.

The other half of the village, 1,379 homes, had already been purchased for 268 million pounds and would be run by joint venture Triathlon Homes for affordable housing.

The village cost 1.1 billion pounds to build, and the taxpayer is expected to pick-up the shortfall, which equates to about 275 million pounds.

ODA’s return is better than it had forecast in 2009 when it said it expected to recoup at least 324 million pounds from the sale of the flats.

“This is a fantastic deal that will give taxpayers a great return and shows how we are securing a legacy from London’s Games,” Secretary of State for Culture, Olympics, Media and Sport Jeremy Hunt said in a statement.

Originally, the 2,800-apartment village was to be a private venture by developer Lend Lease but the global credit crunch meant investment dried up and the government opted to fund it itself.

Delancey and Qatari Diar beat a rival bid from Hutchison Whampoa, which is Hong Kong billionaire Li Ka-shing’s flagship ports-to-telecommunications conglomerate.

They also beat a 1 billion pounds proposal from the Wellcome Trust to take over all the 2.5-kilometre-square Olympic park.

Editing by Andrew Macdonald, additional reporting by Avril Ormsby