Is Qatar now London’s biggest land baron?

When it comes to real estate investments, Qatar is collectively the biggest landlord in London. In fact, it is said, the Qatar royal family now owns more of London than the Crown Estate, a collection of lands and holdings in the United Kingdom belonging to the British monarch. 

“Over the last two years, Qatar has invested in excess of $9 billion in real estate investments. And they are certainly looking out for more assets,” Declan McNaugton, Managing Director, Chestertons Mena, told My Salaam.

Chesterons has been selling London off-plan property for the last seven years, with the main focus on investors from Qatar, Saudi Arabia, and Kuwait.

“Obviously, Qatar leads the way, always,” McNaughton said.

“Whenever you do an event in Qatar, they come to the table with more knowledge than the people who you meet in [London]. They know which streets they want to invest in. They know which buildings are best suited for them. They are very focused on London and know every corner of the city, where to buy and where not to buy.”

One of the latest celebrated deals was the $2 billion home rental business announced by Qatari Diar, which involved the sale of properties in the former Olympic Village to the kingdom in 2011.

Qatari Diar, which is the property development arm of the Qatar Investment Authority (QIA), has been investing and implementing real estate projects both within and outside the country. It has tied up with British developer Delancey Estates and a Dutch pension fund to manage an eventual portfolio of 4,000 homes in London.

TROPHY ASSETS

Interestingly, Qatar has been gaining ground in London’s real estate for quite some time:

• In 2007, Qatari Diar bought the site of the Chelsea Barracks.
  
  
• The QIA bought over 20 percent of the London Stock Exchange in 2007.
  
  
• The QIA snapped up a 20 percent stake in Camden Market in 2008.
  
  
• US Embassy building in Grosvenor Square, Mayfair, in 2009.
  
  
• Luxury department store Harrods was acquired by Qatar Holdings from businessman Mohammed Al Fayed in 2010.
  
  
• The QIA owns 95 percent of Europe’s tallest skyscraper, the Shard, and former Prime Minister of Qatar Sheikh Hamad bin Jassim bin Jaber Al Thani owns One Hyde Park, one of the world’s most expensive apartment complexes.
  
  
• The Qatari ruling family snapped up the Olympic village in 2011.
  
  
• The QIA bought the Canary Wharf Complex in 2015.
  
  
• The real estate investment arm of the Gulf kingdom again picked up three high profile hotels—The Claridges, The Connaught, and The Berkley—in 2015

MINTING NEW STRATEGIES

If five years ago it was all about acquiring London’s trophy assets, the Gulf kingdom is now actively pursuing better investment strategies, with an eye on return on investments.

INSTEAD OF BUYING ASSETS AND BECOMING AN IDLE LANDLORD, THEY ARE NOW BUILDING AND ADDING TO THE COMMUNITY AND COUNTRY

“For example, converting the Olympic village into serviced apartments would definitely give them a huge upturn in its value,” McNaugton said. “We are even seeing 30- and 40-year-olds buying property to rent out or for more yields.”

“The Olympic village now makes them a notable developer in the town. If you are building 4,000 houses, the job creation through that alone will have a positive effect,” he adds.  

According to McNaugton, these big budget Qatari purchases have helped developers scale up their business far beyond what they would normally do.

“Famous London developers are now looking forward to announce more projects. For instance, the Berkeley Group can take up ten big projects a year and expand business because of the GCC money.”

“It’s rapidly bolstered the local economy and the residential market has been growing steadily over the last seven years,” he concludes.