London Olympic Village Sold In £557m Deal

London's Olympic Village has been sold to property developer Delancey and Qatar's sovereign wealth fund for £557m.

The joint venture will see the 27-hectare site become a "new neighbourhood" for London following the games.

It will have a mix of affordable housing, luxury new homes, schools, healthcare facilities and open space, according to Delancey.

Olympic bosses say the £557m sale delivers a "significant return to the public purse" from the development, which cost around £1bn.

A further £268m has already been recouped from the sale of 1,379 affordable housing units on the site to Triathlon Homes.

That leaves a shortfall of £175m, which came from the taxpayer-funded Olympic budget after no competitive private investors came forward when construction began during the recession.

However, an Olympic Delivery Authority spokesperson told Sky News the Government never expected to make all the money back.

This is because the scale of the project - which involved creating a brand new infrastrucure on what was an empty site - would always require an element of public sector funding.

The Mayor of London Boris Johnson described the sale as a "great deal for London" that showed the confidence big private investors had in the future of east London.

"It is another big step towards securing a fantastic future for the new neighbourhoods and communities we have always said would be created as a major legacy for the capital after the 2012 Games," he said.

Delancey and Shard Tower developer Qatari Diar, the property arm of the Qatari sovereign wealth fund, topped a rival bid from Hutchison Whampoa, owned by Hong Kong billionaire Li Ka-shing's.

They also beat a £1bn proposal from the Wellcome Trust to take over all the Olympic park - rather than just the village.

Mohammed bin Ali Al Hedfa, chief executive of Qatari Diar, promised that the village would become a "fitting legacy" to the 2012 Games.

"Our commitment to the UK market and to building longterm relationships with our partners and the wider community is of paramount importance to us to ensure that we leave a positive cultural, environmental and sustainable footprint," he said.

However, the ODA itself admits the task of building a new neighbourhood from scratch is unprecedented, and it is likely not to be without challenge.

Concerns have also been raised over whether the type of housing provided will be suitable - and genuinely affordable - for the local community.