Property developer Qatari Diar has made its first foray into the US property market with a deal to build a $700 million development in Washington D.C., a company statement said on Tuesday.

Diar, the property arm of the Gulf state's sovereign wealth fund, will invest in a fund to finance a 10-acre, mixed-use development in downtown Washington which will include retail space, rental apartment and condominium units and office space, the statement said.

One hundred per cent equity financing has been secured for the project, which is believed to be the largest downtown development currently underway in any US city, the statement said. Barwa Bank's investment banking subsidiary The First Investor will co-invest in and manage the fund.

"We are proud to be sponsoring this landmark development in collaboration with the District of Columbia and our leading US and international design and development partners to create a new neighborhood in the heart of Washington D.C.," said Mohammed Al Saad, vice chairman of Barwa Bank.

"Its ambition, scale and profile are commensurate with its status as Qatar's first major real estate investment in the US, and one which I believe will mark the beginning of a long and successful US/Qatari partnership in premium real estate investment and development."

Diar, which counts London's Chelsea Barracks among its most high-profile overseas assets, has more than 80 projects worldwide, its chief executive has said. The firm was set up in December 2004 to support Qatar's economic development, mainly in real estate. – Reuters