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Preliminary work on building Birmingham’s £200 million Beorma Quarter in Digbeth will begin before Christmas.

The scheme, at the back of Selfridges and close to the Bullring, is being paid for by Salhia Investments, a Kuwaiti investment fund, and includes a 27-storey tower block, apartments and a public square.

It will be the first regeneration project to be built since the recession saw many city centre schemes mothballed at the end of 2008.

Confirmation of progress on Beorma came in the week that the city council signed a unique partnership arrangement with Abu Dhabi, raising hopes that more redevelopment in Birmingham will soon be underpinned by oil-rich Middle East funds.

Council leader Mike Whitby signed a Memorandum of Understanding with Abu Dhabi’s Department of Municipal Affairs – the first of its kind between the wealthy Emirate and a º£½ÇÊÓƵ local authority. Under the agreement, the council will provide Abu Dhabi with expertise and help set up local government structures.

In return, Rashid Mubarak Al Hajeri, chairman of Abu Dhabi’s department of municipal affairs, is to promote the benefits of Birmingham as a business destination among state-backed investors across the United Arab Emirates and other Gulf states.

Coun Whitby (Con Harborne) said he hoped Birmingham would soon rival London as the first port of call in the º£½ÇÊÓƵ for Middle East investors.

He said: “This partnership offers fantastic opportunities to gain direct access to some of the wealthiest and most ambitious investors in the world.

“We have been looking to develop the many commercial and cross-cultural opportunities that exist for the city of Birmingham outside of the º£½ÇÊÓƵ, and in the Emirate of Abu Dhabi we have found a partner that parallels our thinking and our vision of excellence.

“For too long the world has seen the º£½ÇÊÓƵ as a London-centric nation state. There has been a lack of understanding of the richness outside of London.

“We are starting the journey that says that Birmingham offers unrivalled opportunity as a city ripe for global investment. It is also a great endorsement that from the entire world they have chosen Birmingham as the model for how to develop successful local governance structures.”

Mr Al Hajeri said: “By partnering with Birmingham City Council, we can learn from their experiences to inform and drive our ambitious plans and achieve recognition for our accomplishments so far.”

Planning permission was granted for the Beorma Quarter in August 2009, although the council conservation panel described the design as “abominable” and lacking in any architectural merit.

Work will begin on stripping out the listed Cold Store building opposite St Martin’s Church on December 1.

An application to change the planning permission to include a restaurant and bar inside the Cold Store is likely to be lodged with the council shortly.

It is also proposed to build a hotel on the corner of Digbeth Street and Allison Street instead of offices.

Subject to securing planning consent, full work on the first phase of the Beorma Quarter will start next April.

Construction of the tower at the corner of Digbeth High Street and Park Street is envisaged to start at the end of next year.