Qatar's property investment arm Qatari Diar is close to launching syndication of a 1.7-billion-euro ($2.5 billion) loan to finance the Gulf state's acquisition of French engineering company Cegelec, a magazine reported.

Qatar National Bank is underwriting the loan, London-based Meed reported on Friday.

Qatari Diar is owned by the country's sovereign wealth fund, Qatar Investment Authority (QIA), and a partner.   

'The new Qatari debt is associated with the acquisition of French engineering firm Cegelec in July by the QIA,' Meed reported, citing bankers.

Qatari Diar March said in March it was raising $2.5 billion in an 3.5-year syndicated Islamic loan to finance the purchase of the Chelsea Barracks in London.

That loan was downsized to $1.36 billion after spending longer than anticipated in syndication, it said.

The new loan will target European banks and be priced in euros, a source said.-Reuters