Qatari company's move shows its plans to expand in Europe
Barwa takes control of major London project
While most regional developers are losing sleep over how to cope with recessionary pressures and stay commercially viable, one developer is in acquisition mode. Barwa Real Estate, one of the largest property investment and development companies in gas-rich Qatar, yesterday said it had acquired the Park House, a mixed-used planned project in London's West End, for £250 million.
Barwa has taken over the project from Land Securities, the UK's largest developer, although the British company will still supervise construction of the development on Oxford Street. It is expected to be completed in 2012. The acquisition is the first major wholly owned investment made by Barwa in the UK and the company said the deal demonstrated its commitment to Europe as part of Barwa's growth strategy.
It said it signalled the company's particular interest in strengthening its portfolio in London. "Barwa has exhausted its local market in Qatar and they had to look outside for growth. It's a strategic investment for the company," said Majed Azzam, a properties analyst at Al Futtaim HC Securities in Dubai. Barwa this year acquired the entire share capital of Qatar Real Estate Investment Company in a share swap deal valued at US$862m. Barwa is 45 per cent owned by Qatari Diar Real Estate Investment, a property investment arm of the country's sovereign wealth fund Qatar Investment Authority.
Barwa shares closed flat yesterday in a broadly negative Doha market at 30 rials. The shares have been on the rise since the start of the month, adding 4.5 per cent. They have recovered 11.9 per cent of their value from a 52-week low of 26.80 rials in February. "Short-term investors usually responds negatively to acquisitions as they consider it a burden on company's liquidity position," said Wadah al Taha, the chief investment officer at Al Zarooni Group in Dubai. "We saw that in Abu Dhabi today as well, when Abu Dhabi Commercial Bank shares ended lower after the acquisition [of the Royal Bank of Scotland's local banking unit]announcement."