Qatari Diar targets European property as prices fall

ATTRACTIVE PROSPECT: London commercial property prices have fallen 22 percent since their 2007 peak. (Getty Images)

A unit of Qatar Investment Authority (QIA) said on Monday it was looking into investing in Europe, including buying London office blocks worth up to 500 million pounds ($878.4 million), as prices were expected to fall.

"We are looking at buying office blocks in London because they are always in demand... we are looking at an investment of between 80 and 500 million British pounds," Ahmed Al-Mazroei, deputy chief executive of Diar, told newswire Reuters.

Al-Mazroei said Diar, the property arm of Qatar's $40 billion sovereign fund QIA, was looking to benefit from an expected decline of 15-20 percent in the European real estate market in the coming two years, which he said would make prices "cheap" in view of the liquidity crisis.

Commercial real estate valuations in Britain are 22 percent down on average from their peaks in the summer of 2007.

In September QIA bought a 20 percent state in British property company Chelsfield Partners LLP.

QIA also holds stake in Britain's J Sainsbury of approximately 27 percent, a stake in the London Stock Exchange of 15 percent and a 6 percent holding in Barclays. Its property interests include a 15 percent stake in Songbird Estates.

Asked about an offer to increase Diar's stake in Monaco casino and hotel group Societe des Bains de Mer, Al-Mazroei said: "The offer is still there... the size of the Monaco deal is attractive."

Diar, which owns 2.45 percent of Societe des Bains de Mer, had said in July it was dropping its offer for a larger stake due to opposition from management, which it said would only support a 10 percent stake. Diar had offered earlier to buy Societe's entire floating stock for 400 million euros ($543.6 million).

Al-Mazroei said the firm was also looking at opportunities in either China, Hong Kong, Vietnam or Cambodia. QIA has been one of the most aggressive sovereign wealth funds in recent years.

"We think that $500 million is reasonable to go into the development of major mixed-use developments in one of these countries," he said on the sidelines of a real estate fair in Dubai.

Al-Mazroei also said that the firm could also look at opportunities in the United States in 2009. (Reuters)

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