One of Qatar’s largest property developers has revived plans for a massive new complex that contains used car showrooms, repair shops and offices for related government services off Salwa Road.
During a press conference yesterday, Barwa Real Estate Co. announced an agreement with Qatar’s Ministry of Municipality and Urban Planning (MMUP) to rent 115 hectares of land in Rawdat Rashid for its “Motor City” project.
Used car shops would encompass roughly one-third of the site. The rest would include:
- Car workshops;
- Maintenance centers;
- Used car warehouses;
- Auto rental businesses;
- Banks;
- Insurance firms;
- Driving schools;
- A race track;
- A hotel;
- Accommodations for workers;
- Offices for government branches including the traffic department, technical testing, Ministry of Interior, Civil Defense and the MMUP.
The entire project – including detailed design work and construction – is expected to take about four years, the company added in a statement.
Barwa previously said that it expected to break ground on the project in 2011.
Since then, the developer appears to have scaled back its plans, reducing the size of Motor City by more than 40 percent. The cost has also dropped from an estimated QR2 billion (US$549.21 million) to QR1.5 billion ($411.91 million), according to media reports.
Qatar has a robust used car market, driven in large part by the high turnover in the country’s expat population. While there are several pre-owned vehicle lots and service facilities across the country, particularly along Salwa Road, many are located considerable distances from one another and, according to Barwa’s top executive, lack indoor space:
“Many of the showrooms are exhibiting cars outside their shops, which is not the right practice,” Barwa Group’s acting CEO, Ahmad Abdulla Ali Al Abdulla, said yesterday, according to the Gulf Times.
Ambitious endeavors
Barwa has a history of proposing massive multibillion-riyal projects, but has been selling off assets to government-backed entities in recent months as part of an effort to reduce its debt.
It’s currently constructing the 10-tower Qatar Petroleum District in the southwest corner of Doha’s central business area. Originally conceived as the Barwa Financial District with global and local banks as tenants, the real estate firm sold the project to the state-owned resource firm in 2011 for approximately QR11 billion (US$3.02 billion).
More recently, the real estate firm opened the first phase of its Barwa Al Baraha “Workers’ City” housing development earlier this year as well as parts of Barwa Commercial Avenue, a one-million-square-meter retail development near the Industrial Area.
However, as it wrapped up construction on the shopping area, Barwa was also finalizing a deal to sell its 95-percent stake in the project to Labregah Real Estate Co., a wholly owned subsidiary of the Qatari Diar Real Estate Investment Co.
The deal is part of a government bailout plan that requires Barwa to sell QR20 billion ($5.49 billion) worth of assets to the Diar and also included the developer offloading its share in Barwa Bank.
The Diar is the real estate arm of Qatar’s sovereign wealth fund and owns 45 percent of Barwa Real Estate.
The company said it swung to a QR42.48 million ($11.67 million) second-quarter loss earlier this year, compared to a QR38 million ($10.43 million) profit a year earlier.
However, it managed to reduce its liabilities by more than 16 percent during the quarter to QR26.27 billion ($7.21 billion).
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