Qatar to buy (more) London institutions 16, November 2010Posted by thegulfblog.com in Qatar.
Tags: Qatar, Qatar buys london hotels, Qatar Investment Authority
The investment arm of Qatar’s Sovereign Wealth fund is reportedly seeking to buy three of London’s most prestigious hotels, The Connaught, The Berkeley and Claridges, for £1 billion.
It appears that the hotel’s parent group is currently seeking to refinance $1 billion worth of debt, which QIA sees as an opening.
These London institutions would fit in well with Qatar’s burgeoning portfolio of blue-chip British investments which currently includes Harrods, the (soon to be former) US Embassy in Grovesnor Square, Canary Wharf, Chelsea Barracks, the Shard at London Bridge, shares in the LSE, Barclay’s Bank and Sainsbury’s to name but some of Qatar’s recent purchases.
Qatar first and foremost wants to make a profit from these ventures. And they have in the past, with Barclay’s being the best example. They clearly feel that the London market generally is currently relatively depressed and that there are bargains to be had. It is also a good sign for the health of London that such investors who could spend their money anywhere on earth continually return to London.
There are also notions of recognition and security. Were something catastrophic to happen to Qatar (as it did to Kuwait) then with all these ties being established, Qatar could rely on a (more) vigorous reaction from the UK in their aid…so goes the theory.
Lastly, I always think that banks, (extremely) high-end real estate like hotels and the like are targeted by QIA because ordinary Qataris can relate to them. Qataris are a rich bunch but still grumble from time to time that the government can be ‘wasting’ their money. So, if and when Qatar buys Harrods or the Savoy as was recently mooted, Qataris have a clear understanding of where their money is going.