x Abu Dhabi, UAEThursday 27 July 2017

Francophilia spurs Qatar's latest empire expansion

Qatar's French connection deepens with purchase agreements signed for the Concorde Lafayette and Louvre hotels in Paris and two five-star hotels in Cannes.

The rooftop towers of the Carlton Hotel in Cannes, which is owned by Qatar interests. Qatar’s acquisition activity in France has developed with a pace and appetite for variety shown elsewhere in the world.
The rooftop towers of the Carlton Hotel in Cannes, which is owned by Qatar interests. Qatar’s acquisition activity in France has developed with a pace and appetite for variety shown elsewhere in the world.

Marseille // From football and handball to some of the finest hotels of Paris and the Côte d'Azur, Qatar's French connection is at the heart of the latest expansion of the Gulf state's international business empire.

In another deal fuelled by Qatar's gas and oil riches, an intent to purchase has been signed for the Concorde Lafayette and Louvre hotels in Paris and two five-star seafront hotels, the Palais de la Méditerranée in Nice and the Martinez in Cannes. The cost is estimated at €700/750 million (Dh3.2/3.4 billion).

The acquisitions, expected to be ratified soon by the current US owners, Starwood Capital, will add to an impressive portfolio assembled as Qatar continues to extend its overseas business reach.

Another renowned Parisian hotel, the Royal Monceau, and one in Cannes, the Carlton, closely associated with the glitzy film festival and listed by the French government as a national historic building, are already owned by Qatar investment interests.

Qatar's activity in France has developed with a pace and appetite for variety shown elsewhere in the world. In the United Kingdom, a property subsidiary of the Qatar Investment Authority (QIA) is developing Chelsea Barracks, a central London site earmarked for luxury accommodation, and similar plans are afoot for the Olympic Village once the summer games are over.

In France, the most high-profile purchase has been that of the Paris Saint-Germain (PSG) football club. Better known in recent years for badly behaved supporters than for sporting success, PSG has spent lavishly since the takeover, completed in March, began last year.

Stars brought to the club include the Argentinian midfielder Javier Pastore, whose €42.9 million price tag was a record for France.

The French sporting press confidently predicted that PSG would run away with the top division, Ligue 1. But while Abu Dhabi's transformation of Manchester City, owned by Sheikh Mansour bin Zayed, secured the Premier League title, PSG had to make do with second place behind the unfancied Montpellier.

Even so, the willingness of Qatar to pump more money into the quest for glory puts the club in pole position to take the title next season.

Now Qatar has turned its attention to another sport popular in France. The Qatar Sports Investments (QSI) branch of the QIA, the same subsidiary that owns PSG, has bought Paris Handball.

"It is a long-term commitment and our wish is to build in time a team ranked at the highest level in France and Europe," said Nasser Al Khelaifi, already president of PSG and now in charge of the handball club.

If the sporting interests grab headlines, the property and industrial arms of the Qatari business empire's French outpost are impossible to ignore.

The QIA has two per cent stake in the French petroleum giant Total, a natural partnership given the company's own extensive dealings with the Gulf.

Qatar's Paris embassy is housed in magnificent premises standing in the shadow of the Arc de Triomphe. The address is 1 rue de Tilsitt but the building has a triangular location and could as accurately be said to be in either of the grand avenues, Champs-Elysées or Friedland.

And along the Champs-Elysées itself, routinely described by French broadcasters as the world's greatest avenue, the QIA recently bought, for €500 million, a building stretching to 26,000 square metres with tenants including a Virgin megastore and Monoprix supermarket.

Further expansion of the hotel segment of Qatar's French holdings is therefore logical.

Although official announcements are awaited, French media have quoted sources close to the negotiations as identifying the hotels' buyer as Katara Hospitality, a descendant of Qatar National Hotels, created by the Qatari government in 1970 to manage the country's first five-star hotel, now called the Doha Marriott.

Why such interest in France? Qatar's ruling family, headed by Sheikh Hamad bin Khalifa Al Thani. is known to be Francophile. But the reasons inevitably go far beyond such affinity.

"Qatar's investments here go back long enough, even if it was when they bought PSG that we started talking about them," Pascal Boniface, director of France's Institute of International and Strategic Relations (IRIS), told the newspaper La Dépêche du Midi

"Their goal is clearly to be known internationally, compensating for … their small population."

He also attributed the excellent diplomatic and business relations between the two countries to Doha's desire not to place sole reliance on the United States for its western links. "Qatar is investing in the US and in other European countries," he said. "But it is true there is a focus on France as the two countries know each other well, and it is easier to do business when there is trust."

Qatar seems far from ready to pause in its global odyssey in search of investment opportunities.

The QIA, established in 2005, has stakes in banking, car manufacturing, telecommunications and media as well as sport and other sectors. Outside France, the Qatar Holding subsidiary lists ownership of the London store Harrods and investments in the UK supermarket chain J Sainsbury, the London Stock Exchange, Porsche and Volkswagen. The Qatari television network Al Jazeera has recently negotiated rights to broadcast live Champions League and Ligue 1 football in France.

If the intention was to ensure Qatar had a bigger place on the international map than suggested by a country of just 11,500 square kilometres, it may already be a case of mission accomplished long before it stages the 2022 World Cup.

But it may remain beyond even Qatar's powers to enable Javier Pastore, after his disappointing first season at PSG, to live up to Nasser Al Khelaifi's view that he is the "new Messi".

foreign.desk@thenational.ae