Qatar’s UK investment to surge despite Brexit

High ranking officials from the Middle East country are visiting the British capital and second city Birmingham and will announce major new injections of cash this week.

Qatar Investment Authority part owns the Shard tower in London and is among representatives visiting the UK ahead of expected investment announcements. Courtesy : Eric Smerling

Update:

Qatar will invest £5 billion (Dh23.14bn) in Britain over the next few years, the country’s minister of finance said during a visit to London on Monday.

Earlier, the head of Qatar’s sovereign wealth fund said he still saw opportunities to invest in Britain after it leaves the European Union.

“Qatar will invest £5bn in the UK over the next three to five years,” said the finance minister Ali Sherif Al Emadi on the sidelines of a Qatar investment forum.

Qatar had said it would announce major new investments in the United Kingdom this week, deepening the countries’ trade ties as it prepares to quit the European Union.

The emirate’s prime minister, Sheikh Abdullah bin Nasser bin Khalifa Al Thani, is leading a delegation of more than 400 officials and business executives to London and Birmingham to a two-day meeting with UK counterparts, according to government statements. The visit concludes on Tuesday, a day before the UK prime minister Theresa May plans to start the two-year clock on Brexit negotiations by invoking Article 50 of the Lisbon Treaty.

“Qatar has great confidence in the UK, and this confidence will be demonstrated in the additional investments we will make over the next decade,” Mr Al Thani said Monday as the event opened at London’s Grosvenor House Hotel. He disclosed no details about prospective deals.

Qatari investments would help to cushion the economic fallout from Brexit on both sides. Ahead of the break, the UK is taking steps to maintain foreign investments, going as far as to provide written assurances to Nissan in an effort to stem competition from other EU members that want to poach talent and capital.

Qatar, too, has a big stake in keeping the UK economy and asset prices strong during and after Brexit. It is the world’s biggest producer of liquefied natural gas, and delivers 90 per cent of the UK’s imports of the fuel. The emirate stepped in to invest billions in Barclays during the global financial crisis and has built up a stock and property portfolio worth more than £40 billion (Dh184.63bn) over the past decade.

The delegation to the UK this week includes the chief executives of Qatar Investment Authority (QIA), Qatar Petroleum and Qatar Airways. George Iacobescu, the chairman and chief executive of Canary Wharf Group, partially owned by QIA, and Xavier Rolet, the chief executive of the London Stock Exchange Group, another portfolio company, are also attending the investment forum.

“Qatar doesn’t see Britain leaving the EU as impacting their relationship and it may be an opportunity for it to be stronger,” Rachel Pether, an adviser at the Sovereign Wealth Fund Institute, said in Dubai.

Protecting the value of Qatari assets in the UK -– which range from Harrods department store, a stake in Sainsbury grocery chain and upmarket properties such as the Savoy Hotel and the Shard tower – is not the only motivation behind the emirate’s road show. Lower oil prices have sapped government revenue, forcing Qatar, the richest country in the world on a per-capita basis, to issue Us$9bn bonds in May. Officials are seeking more investment flows as the country diversifies its economy away from oil and gas and continues a $200bn infrastructure upgrade before the Fifa 2022 World Cup.

“We want to attract institutional money from the UK, especially through our forthcoming exchange-traded fund that will list on the Qatar Stock Exchange,” said Fahmi Alghussein, the chief executive of the Doha-based asset manager Amwal, who plans to attend the London trade event.

One indicator of Qatari appetite for investment in the UK is continued purchases of real estate, both by the state fund and individuals. Foreign investors see the top end of London’s property market as an attractive haven, with the pound’s slump offsetting political uncertainty, according to Laurence Ronson, sales director at Ronson Capital Partners. That is despite the fact that owners are holding back while the value of their homes stagnates and in many of the best districts of the capital, decline.

“London looks like exceedingly good value in terms of a weakened sterling,” said Mr Ronson, who is developing two luxury buildings in the capital. “We’ve seen that with Chinese, Middle East and American money looking at opportunities. All the doom and and gloom that has been predicted post-Brexit has not happened. In fact, the economy is growing.”

* Bloomberg

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