The London department store Harrods has been sold for £1.5 billion.

Mohammed Al Fayed has sold the infamous London department store Harrods to Qatar Holdings – the investment arm of the Qatari royal family.

It has reportedly been sold for £1.5 billion ($2.3bn), and an adviser to the deal with Qatar Holdings, Ken Costa, Chairman of Lazard International, said Mr Al Fayed was retiring “to spend more time with his children and grandchildren.”

However, the news of the sale follows Mr Al Fayed’s comments less than a month ago denying rumours of a sale, and saying in an interview  with the Sunday Times that he planned to own the business for the rest of his life and when he died hoped to be entombed in a mausoleum on the roof of the store.

He would spend two hours each day walking around the emporium in London’s Knightsbridge – which boasts 330 departments and covers 4.5 acres – with over one million square feet of selling space. The Egyptian-born businessman bought Harrods in 1985 for £612 million and has spent £400m refurbishing it over the past few years – which has included a rather ostentatious Egyptian-themed room.

 The sale, signed in the early hours of 8 May, will include all parts of the Harrods group, including Harrods Estates and a charter aircraft service.

Qatar Holdings is the investment arm of the emirate’s sovereign wealth fund, Qatar Investment Authority – which failed in a bid for Sainsbury’s in 2007; however, it does own a stake in Porsche, is the third-largest shareholder in Volkswagon and owns shares in the London Stock Exchange and Barclays.

Its Chairman, Sheikh Hamad Bin Jassim Bin Jabr Al-Thani, who is also Qatar’s Prime Minister, said Harrods would add “much value” to its portfolio of investments and generate “good and stable returns as a business”.

He added: “It’s a historical place. I know it’s important, not only for the British people but it is important for the tourism.” His Vice-Chairman, Dr Hussain Ali Al-Abdulla, said the acquisition was a “landmark transaction”.

Both men were given a tour of the store by Mr Al Fayed before a news conference in the fourth floor Georgian Restaurant.

Mr Al Fayed will continue to promote the store in the role of Honorary Chairman. His own UK business interests include the Premiership football club Fulham FC, and a recent rich list put his fortune at £650m. Strangely enough, despite living in Britain for decades, the multi-millionaire businessman has repeatedly been refused a UK passport.