Trophy-Asset Buyer to Become Seller

Category: Commercial Real Estate

Qatar, one of the world’s biggest buyers of trophy real estate assets, is set to become one of its biggest sellers, reports Bloomberg. The Qatar Investment Authority (QIA) is said to be considering repatriating at least some of its assets currently invested overseas in more than $320 billion in real estate.

The article reports that the QIA has, over the past few months, shed holdings in Credit Suisse Group AG, Rosneft PJSC, and Tiffany & Co. Further assets that could be sold include stakes in Glencore Plc and Barclays Plc.

Boycott represents “risk event”

“Sovereign wealth funds, such as the Qatar Investment Authority, are always national buffers against adverse risk events,” Sven Behrendt, managing director for GeoEconomica, in Geneva, Switzerland, told the news outlet. Qatar has been subject to an economic blockade and diplomatic boycott by its Arab neighbors Saudi Arabia, the United Arab Emirates, and Bahrain since June 5 of this year. “Since the boycott is such a risk event for Qatar,” explained Behrendt, “the assets stored within QIA will need to serve as such a buffer.”

Reversal of 10-year buying spree

The shift from buyer to seller marks the end of a more than 10-year strategy by Qatar, which reportedly formed the QIA in 2005 in the wake of a windfall from liquefied natural gas sales. Since then, the fund has acquired trophy assets around the world, including in Hollywood, New York office space, London residential property, luxury Italian fashion brands, and even a soccer team. According to the Sovereign Wealth Fund Institute, the QIA is the ninth largest such fund globally.

London hotels, office properties could be sold

The article reports that some notable trophy real estate assets may be among those that the QIA decides to sell. These reportedly include stakes in London’s Savoy Hotel, the Shard skyscraper, the Olympic Village, and a Canary Wharf financial district office building leased to Credit Suisse.

Posted on: Monday, October 9, 2017