Qatar’s promise

Since oil was first discovered in Qatar in the 1940s, this once poor fishing and pearling region has gone from strength to strength economically and now boasts an economy and standard of living to rival that of any modern country.

Located in the Arabian Peninsula and bordering Saudi Arabia to the South, the emirate is otherwise surrounded by the Persian Gulf. It is independent and has been since the early 1970s; it does not form part of the United Arab Emirates and it has not become part of oil-rich Saudi Arabia.

Qatar is the latest buzz word in emerging property markets and astute investors are looking to the region for more fantastic opportunities of the kind that Dubai has brought to the world's attention in recent years.

Although rich in natural gas, Qatar is following in Dubai's footsteps in its efforts to diversify the economy as it strives to maintain its position as one of the fastest growing and richest per capita countries globally. The fledgling investment property market in Qatar has been strengthened by global confidence in Dubai's market and as a result the property market in Qatar is heating up.

The question on everybody's lips, however, belies concerns about the long-term fundamentals underpinning the property market. With such a long line of GCC states injecting unfathomable sums into the diversification of their economies and clamouring for the hearts and minds of foreign investors, the big question is: Why opt for Qatar?

The show put on by competing nations has, admittedly, raised some eyebrows. Record-high energy prices over the past few years have fuelled a real estate development frenzy across the Gulf Arab states with countries competing to unveil the biggest and boldest projects.

The UAE's Dubai, which is by far leading the development craze, announced plans last year to build the world's largest hotel strip at a cost of US$27.2bn - rivalling that of famed US gambling town Las Vegas. Meanwhile, Saudi Arabia - the world's largest oil producer - announced its plans to build the King Abdullah Economic City on its Western coast at a cost of US$26bn.

In assessing Qatar's potential as an investment hotspot, however, planning would have to be a key word. One of the most striking developments in modern Qatar is The Pearl. This man-made island development will cost around US$2.5bn to construct and is so far the largest property development ever undertaken in Qatar.

The second phase of the development was released in March 2005. When the entire Pearl project is completed it will form a four million sq m island - home to around 30,000 people in a range of luxury and stunningly designed villas, town houses and apartments.

However, The Pearl is about much more than just housing. Planners have ensured that the conditions necessary for the cultivation of a thriving service sector will be built into the development itself; the Pearl will also feature hotels, restaurants, shops and boutiques as well as a 700 berth international yachting hub. The first buildings are due for completion this year.

The significance of The Pearl should not be overlooked. It will raise the profile of the emirate, significantly improving and increasing tourism numbers and unlocking the secrets of Qatar's potential for the world to see. A well-publicised opening can be expected and as a result the desire for freehold property in Qatar is likely to intensify, with all the important enablers for foreign investment already in place. This can only lead to a strengthening of the property market in the near term.

It would be a mistake to believe that Qatar's landmark projects end with The Pearl, however. Two Qatari property developers recently unveiled a new US$5bn tourism programme, adding to a slew of major investments underway in the emirate. The complex will include two hotels, a marina, chalets, ‘abstract design' gardens and sports facilities on an area of almost eight million sq m - all this according to Ghanem al-Saad, chairperson of Barwa, one of the main developers involved in the project. Construction in Al-Khor on Qatar's Northeastern coast will take about five years to finish, according to a statement issued by Barwa and its partner Diar. Incredibly, at the time of this latest announcement Diar had not long before declared its intention to build a new residential and leisure city called Lusail at a cost of more than US$6bn.

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