Putting Qatar on the Map: Investing in Infrastructure
On Day Two of the Invest-In-Qatar Forum in New York, the focus moved from Qatar — petrochemical powerhouse, to Qatar — thriving infrastructure.
Those who want in on the market flocked to the conference’s real estate matchmaking sessions, or virtual speed-dating for investors vying for a stake in Qatar’s future. Partnerships were made today that will add to the $100 billion Qatar promises to spend on transportation and infrastructure in the next 10 years.
And beyond interest in both commercial and residential real estate, the buzz also surrounded tourism and sports venue development as this tiny Gulf emirate gears up to host the 2022 World Cup.
Bechtel Corp., a U.S. construction and engineering company, was there. Its president, David Welch, is bullish on Qatari infrastructure: “The fundamentals are excellent. The political environment is stable, and I believe the way they have structured their development of the next 20 years is promising and a real thing.”
One of Qatar’s major infrastructure projects now underway is the New Doha International Airport. Valued at $14 billion, it is set to handle 24 million passengers on opening day. The airport is scheduled to open in early 2012, and is expected to handle 48 million passengers per year by 2025.
Welch adds, “Take the airport project for example, with which we were involved. A few years ago I flew to Pakistan through London. Today if I were making the same trip, I might go through Doha. So I think if you look at the pattern of development — of what they are trying to achieve — these are not unrealistic goals. As a business operating there, [our] experience has been good.”
Farhan Mahmood, CEO of Citibank, Qatar, moved from London to run the corporate and investment banking business in the capital city, Doha. “We have a lot of competition here. We’ve been operating in Doha for four years, since 2007 in the Qatar Financial Center. It’s an expat city, primarily. Everything has been built from the ground up [including] everything from ports, airports, and highways. To be part of that is unique. It’s an entirely new city; it’s one big construction site.”
Yet when it comes to real estate, Mahmood says Qatar is not Dubai. “There was a lot of speculation in Dubai. Residential investment is not that. There is no buying and flipping properties which was the case in Dubai – it is for personal use. That was the bubble in Dubai. But here, it’s much more of a market for foreign investors. There is some overreach in the West Bay area in commercial real estate in office space. But because of the 2022 World Cup, it will be absorbed.”
Apart from real estate, Qatar won most investing hearts at the conference with sports. From a poor British protectorate known mainly for pearling, the country is now providing oil and gas to the world and has won the bid to host FIFA’s 2022 World Cup.
Hasan Al-Thawadi, Chief Executive for the Qatar 2022 bid, told the story of Qatar’s victory: “We knew what Qatar stood for, and what it is capable of doing. In the spirit of Qatar– aiming high, and always achieving – we went ahead with the bid for the world cup.”
The win surprised many, given that 100 degrees Fahrenheit and above is the average temperature for five months out of the year. Summers in Doha could dissuade even the most die-hard soccer fan.
Yet Al-Thawadi sees the weather as a hurdle that technology and infrastructure can solve. He added, “As much as weather is a challenge, it is also a great incentive to [set up] cooling systems for stadiums, training sites and fan zones. [Some] are used by our stadium right now very successfully. The World Cup is not a simple event. It touches people, who can see the economic, social, and cultural benefits.”
Indeed, the World Cup 2022 is much more than a game to investors, Middle Eastern and otherwise. The event is a major catalyst igniting the investment initiatives being undertaken.
While the conference was strictly business, for Al-Thawadi and many Qatari, the World Cup is personal. “It’s an opportunity for East and West to meet, and for misconceptions about the Middle East to be dispelled.”