Barwa set to buy up Alaqaria in share deal

Barwa Real Estate yesterday agreed to buy Qatar Real Estate Investment Company (Alaqaria) in an all-share deal as consolidation within the Gulf's property sector gathers pace. Each Qatar Real Estate share will be exchanged for 1.1 shares in Barwa, giving the enlarged company a combined market capitalisation of approximately 11.1 billion Qatari rials (Dh11.2bn).

That would make it the ninth-largest company on Qatar Exchange. Alaqaria would then be delisted from Qatar Exchange. "The primary driver for merging two of the major players is that the government wants to consolidate its exposure in Qatari real estate companies," said Martin Kohlhase, an analyst at Moody's Investors Service. "It has been long in the making and some questions remain on the future structure of the group in terms of creditor protection for the sukuk holders of Alaqaria."

Qatari Diar Real Estate Investment Company, which is part of the Qatar Investment Authority (QIA), holds 45 per cent of Barwa and 27 per cent of Alaqaria. QIA will maintain at least a 45 per cent equity shareholding in the enlarged Barwa group through assets, the company stated. "The two companies are also quite complementary," said Mr Kohlhase. "Alaqaria has been running the property projects largely related to Qatar Petroleum and has more of an industrialised exposure, whereae Barwa has a more commercial and residential exposure."

Barwa currently focuses on development in Doha, while Alaqaria's portfolio is largely in suburban areas and the country's industrial cities. "After the merger, Barwa will be one of the biggest property companies in the region and certainly the biggest locally in Qatar," said Nick Witty, the deputy managing director of DTZ Middle East, an international property consultancy. "Once combined, I suspect their major focus will be on the pipeline development of Qatar."

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