One of Qatar’s largest real estate firms continued to sell off its assets to the country’s sovereign wealth fund this week with the offloading of a massive retail development near the Industrial Area.
Barwa Real Estate Co. said in a regulatory filing that it had sold its 95-percent stake in Barwa Commercial Avenue for QR9.02 billion (US$2.45 billion) to Labregah Real Estate Co., a wholly owned subsidiary of the Qatari Diar Real Estate Investment Co. The other 5 percent is owned by the Qatar government.
The move was part of an existing debt payment plan that required Barwa to sell QR20 billion ($5.49 billion) worth of assets to the Diar. It has helped expand the government’s already extensive influence on the local real estate market in the process.
In January, the Diar said it had agreed to buy Barwa Real Estate’s 37.34 percent stake in Barwa Bank for QR2.4 billion (US$659 million).
And more recently, the real estate group sold its Barwa City project to Labregah Real Estate Co. for approximately QR7.57 billion ($2.08 billion) in May.
That affordable housing development is expected to eventually house 25,000 residents and contain a supermarket, fitness center, playgrounds, a large mosque and a school.
These latest moves deepen the relationship between Barwa Real Estate and the Diar, which owns 45 percent of the developer’s parent company, Barwa Group.
But the sales have yet to reduce the liabilities on Barwa Real Estate Co.’s balance sheet.
At the end of March, the most recent fiscal quarter, the company said it had QR31.45 billion ($8.64 billion) worth of liabilities. That’s up from QR30.59 billion ($8.4 billion) at the end of last year and QR30.68 billion ($8.43 billion) at the end of March 2013.
Still, the company remains in the black, booking a first-quarter profit of QR266.67 million ($73.25 million). That followed a full-year profit of QR1.37 billion ($380 million) in 2013, up 22 percent over 2012.
Barwa Commercial Avenue is a large, partially opened retail development on Industrial Area Road that contains showroom and office space, as well as residential units. It also includes a collection of Chinese shops collectively known as Dragon Mart that are gradually opening their doors this summer.
Barwa says the development totals one million square meters, including 56,600sqm of leasable shopping mall space. Real estate services firm DTZ Barnicke said last year that roughly 60 percent of the 250,000 square meters of showroom space had been leased.
However, local firm Al Asmakh Real Estate Development Co. painted a pessimistic outlook in its most recent market overview:
“Barwa Commercial Avenue … targets customers those which have their establishments within Industrial Area and other outskirt areas of Qatar. However, due to the massive size of the project and location, we anticipate occupancy rate to be on the lower side.”
In and around Doha, several new malls are under construction and competing for retail tenants. These include Festival City, Gulf Mall and the Mall of Qatar, which plans to differentiate itself with high-end entertainment options.
Closer to Barwa Commercial Avenue, the Doha Outlet Mall is slated to open in West End Park early next year.
While consumers are expected to benefit from the abundance of shopping options, real estate experts expect an oversupply of retail space in the coming years, leading to vacant storefronts in less popular malls and plazas.
One of the longest and strangest buildings I have ever seen.
I’ve never seen it. What is so odd about it?
Goes for miles and miles – like a building with no end. Perhaps someone was scared of hights?
So a person could spend an hour or so walking just to find the store that they want?
I think you’re expected to drive from store to store – American style..
Something like this 🙂
Is the fact the kid in the video is not wearing a seat belt a reflection of the views of Barwa Corporation regarding the importance of road safety?
That sounds like a complete mess. It would be great if DohaNews investigates further why the government is buying Barwa assets and what benefits it is expecting from them.
two words… “white elephant”.
I highly recommend the embedded video for anyone who needs a good laugh. It brought tears of laughter to my eyes.
The cheesy American accents narrating the thoughts of Qatari girls shopping were my favorite.
That it is professionally produced makes the out-of-touch messages that much more comical (i.e. someone PAID a lot for this).
comedy gold ! 🙂
A bit of a non story, one government company sells stake to another government company
Take this statement for example.
‘To Labregah Real Estate Co., a wholly owned subsidiary of the Qatari Diar Real Estate Investment Co. The other 5 percent is owned by the Qatar government.”
Guess who owns the other 95%? Er, the Qatar government, so that will be a 100% then. (Qatari Diar is part of Qatar Investment Authority, which is….. The sovereign wealth fund of the state of Qatar.)
Barwa City is NOT an affordable housing development and does NOT contain a supermarket, NO fitness center, NO playgrounds, only a large mosque and a school.
It is comparatively affordable (possibly). I think the shop (Lulu) is to be open by May although not May this year obviously…
Yes, somehow decent. Lulu was supposed to be open August last year. Other amenities…next decade probably.
What does this mean for current residents?