08/12/2011 10:14 EDT | Updated 10/12/2011 05:12 EDT

Qatar's royal family buys stake in 2012 London Olympic Village in huge deal

LONDON - The London 2012 Olympic Village has become Qatar's latest acquisition in world sport.

The property company of the Arab state's royal family and British developer Delancey have signed a 557 million-pound (US$906 million) joint agreement to buy and manage the athletes village as private housing after next year's Olympics.

London's Olympic Delivery Authority said Friday that Qatari Diar and Delancey will take over 1,439 of the 2,818 new homes on the site and acquire land to build as many as 2,000 more.

The deal includes a profit-share agreement, recouping the British government some of the 9.298 billion pounds ($15.13 billion) of public money that the Olympics have cost.

"This is a fantastic deal that will give taxpayers a great return and shows how we are securing a legacy from London's Games," government sports minister Jeremy Hunt said. "The village will be the centrepiece of a new vibrant east London community."

The companies will rent out the homes, making the project next to the Olympic Park and its main stadium the largest of its kind in Britain.

Oil-rich Qatar, which last year won the right to host soccer's World Cup in 2022, already has investments in high-profile London developments including Harrods. The department store was sold to Qatar Holdings for a reported 1.5 billion pounds (then $2.3 billion) last year.

"This is a great deal for London and shows the confidence big private investors have in the future of the city," London Mayor Boris Johnson said.

A company called Triathlon Homes has already been appointed to manage the other 1,379 units in the village as affordable housing for key workers including teachers and health professionals.