Bid to ease strain on government coffers after Games finish
London Olympics agency looks to Gulf
The UK agency responsible for securing the legacy of the London Olympics is looking to woo Gulf investors in an effort to ease the financial strain of the project on government coffers. Olympic Park Legacy is keen to attract private-sector cash to ensure the part of East London hosting the event feels the benefits from a regeneration of the area after the games in 2012.
The drive for investment comes amid expectations that the public-sector outlay to prepare infrastructure and venues for the event will reach a final total of £7.26 billion (Dh40.73bn). After high-profile London acquisitions by Gulf entities, including those of the luxury department store Harrods and the ExCel venue, Olympic organisers are keen to talk to GCC investors about further potential investments in the capital.
"For those sovereign wealth funds, we are very interested in looking to share this opportunity. If you look two or three years ahead, it's really well positioned for investors to place capital," said Andrew Altman, the chief executive of Olympic Legacy, speaking on the sidelines of the City and GCC Conference in London. Although the agency is holding discussions about potential investment in the Olympic Stadium it is looking for investors in the press and media centre as well as property projects, he said. The total area covers 139 hectares with the agency open to considering plans for private-sector development or joint-venture schemes.
Despite government efforts to finalise the long-term outlook for the site hosting the Olympics, uncertainties have remained about what the future is likely to hold for the area after the games. Olympics organisers are on schedule to complete the project despite a £27 million government budget cut, the Olympic Delivery Authority concluded in a report on Monday. The UK coalition government's far-reaching austerity measures to cut the country's budget deficit include a reduction in the cash allocated for the Olympics. "This is the right time to be looking for private sources of capital," said Mr Altman. "The government has made a tremendous opportunity already and now is the time to leverage that investment."
Gulf investors have frequently demonstrated their penchant for London's assets. Qatar Holding recently bought Harrods for £1.5bn while the Abu Dhabi National Exhibitions Company purchased ExCel in 2008 for £165m. Incidentally, ExCel will be one of the main host venues for the Olympics. "The UK continues to be a very attractive investment opportunity for GCC sovereign wealth funds, [SWFs] however, that can accelerate," said Bashir Siman, a special representative to the UAE of financial services at UK Trade and Investment.
"Increasing the share of UK inward investment is possible, provided SWFs find opportunities that meet their specific requirements. After the recession SWFs, arguably, are looking for regular income-generating yields over a number of years rather than simply speculative gains." Infrastructure projects the UK government is keen to develop provide opportunities for a convergence of interests between the country and the GCC in investment, he said.