Barwa Real Estate Group (BRE) has sold its 37.34 per cent stake in Barwa Bank to Qatari Diar, a real estate company owned by Qatar Investment Authority, for around QR2.4bn ($659m). It plans to use the funds to pay off some of its debt.

Qatar’s largest listed developer, which received $7.1bn in financial support by Qatari Diar in June, saw its profit drop 40 per cent during the first nine months of 2013 to QR467.5m.

In October it announced it had agreed to sell assets worth QR20bn to Qatari Diar, which owns 45 per cent in Barwa. The month prior it also said it was looking to sell land in the Lusail area after selling some of its investments in Egypt in February.

It is not the first time the government has stepped in to support to the developer. In 2011 state-carrier Qatar Airways reportedly agreed to rent the entire Barwa City real-estate development from BRE in a deal worth an estimated QR7.1bn. Also in 2011 Qatar Petroleum signed a framework agreement with BRE that would see Barwa Financial District becoming the state energy firm’s headquarter complex.

Qatar’s real estate developers are struggling with oversupply, with Doha’s luxury apartment market increasing by 75 per cent in 2010 despite the population remaining stable over this period. The supply-demand mismatch is expected to reduce in coming years as preparation for the World Cup in 2022 is expected to boost demand in the medium to long term.