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"We are very interested in expanding into the US and further expanding into Europe"
Ghanim bin Saad al-Saad |
Launched in late 2005 and fully owned by the Qatar Investment Authority, Qatari Diar Real Estate Investment Company was initially a regional player. However, its recent purchase of trophy property Chelsea Barracks in London marks a departure for the Doha-based developer and investor. That £959 million ($1.88 million) deal and its innovative financing have propelled Qatari Diar on to the global real estate stage. "We are very interested in expanding into the US and further expanding into Europe and are currently exploring several opportunities," says Ghanim bin Saad al-Saad, chief executive. "We are seeking opportunities all over the world and have just announced a new agreement with the government of Cuba."
The Chelsea Barracks deal, completed in January with partner CPC Group, brought Qatari Diar a 5.2 hectare (12.8 acre) area in the City of Westminster, generally regarded as an important European development site. This headline-making deal was financed by what is thought to be the largest Islamic financing – a $2.5 billion sale-and-leaseback ijara transaction – through a Guernsey-based vehicle called Project Blue.
"Our negotiation for the financing of Chelsea Barracks is testament to Qatari Diar being regarded as a major player on the real estate market, able to attract funds from around the world based on our sound business practices," says Saad al-Saad.
Being backed by the $50 billion Qatari Investment Authority probably helps, too. First and foremost, Qatari Diar is a vehicle that helps to invest Qatar’s vast oil and gas-related wealth to further the state’s economic and political growth. And like many of its neighbours in the Gulf, Qatar has identified real estate as a way to deploy wealth, build its economy outside the energy sector and even see returns. At home, Qatari Diar is deeply involved in community development and it is active throughout the Gulf region, North Africa, Mauritania and the Seychelles.
Many Gulf-based sovereign wealth vehicles, whether sovereign funds or government-backed developers, are vying to make a name in the global real estate markets. Most have started off focused on their home markets, where there is plenty of demand for residential properties and commercial property development is booming.
Qatari Diar is the master developer for Lusail, a 35 square kilometre metropolis under construction on Qatar’s coast, which is designed to become home to 200,000 people. Over the next decade, Lusail will be developed in a series of controlled roll-outs, which should attract outside investment to Qatar. That means jobs for local people and the development of the economy.
"Our sustainable developments will enhance the quality of life in every community they serve, generate investment opportunities for continued growth and, by aligning development with Qatar’s national strategy, further the economic development of the country and the region as a whole," says Saad al-Saad. "These elements guide all of our work, ensuring that what we do provides legacies – cultural, architectural and financial – for the future."
But, as the Chelsea Barracks deal shows, Qatari Diar’s ambitions are growing. In April, it signed a $70 million agreement with Cuba to develop a five-star resort on the island. In February it announced the establishment of a Libyan-Qatari real estate and tourism company to develop resorts in Libya. Apart from development it is also looking into indirect investments, potentially with fund managers as partners.
Like other sovereign wealth investors, Qatari Diar has formed a number of joint ventures with key players in the real estate investment and development field. It has a 45% stake in the Barwa Real Estate Company, a Qatari company, and has formed a joint venture with Vinci Construction Grand Projects, a design and construction company with substantial knowledge of the Middle Eastern region.
"Partners are selected based on their value offerings and alignment with Qatari Diar’s vision and long-term aspirations," says Saad al-Saad. "We view partnering as a long-term relationship and as such scrutinize potential partners to ensure that all fundamentals are in place to support such relationships."
In February, it announced a joint venture with NorthCourse, a global leisure real estate consulting and asset management company. Together they established Qatar Real Estate Partners, which it hopes will become a force in luxury real estate brokerage in parts of the Middle East and North Africa region. Qatar Real Estate Partners has obtained the exclusive franchise rights for the Sotheby’s International Realty brand in Qatar, Morocco, Egypt and Oman.
"These joint ventures and relationships will help Qatari Diar expand its position as a world-class property developer and real estate investment company," says Saad al-Saad.