Mubadala to turn Abu Dhabi island into business zone

ABU DHABI (Reuters) - Mubadala Development, an Abu Dhabi investment arm which manages over $10 billion (5.1 billion pounds) in assets, said on Sunday it will develop an offshore island into a new business district that would house the stock exchange.

Suwa Island, off Abu Dhabi's coast, will be developed by John Buck International, a joint venture Mubadala set up in March with Chicago-based real estate firm The John Buck Co.

"It is a multi-billion dirham development and construction has already started," Carlos Obeid, Mubadala's chief financial officer, told a news conference. "The island will be home to the new headquarters of the Abu Dhabi Securities Exchange."

Obeid said the project would be funded by a mix of equity and debt but would not provide details on actual costs.

"We are in discussions with financial institutions for the debt part and Mubadala will provide the equity," he said.

Mubadala's global shareholdings including a 7.5 percent stake in the Carlyle Group CYL.UL. The wealthy emirate controls the world's fifth-largest oil reserves.

Obeid said the 570,000 square metres development will include commercial and residential buildings as well as a hotel and retail space.

"There is tremendous demand for commercial real estate in Abu Dhabi fuelled by the growth of the economy," he said.

(Reporting by Stanley Carvalho; Editing by Amran Abocar)