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Tue 20 Apr 2010 02:01 AM

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Qatar's Barwa Q1 net profit up 8.3% to $57.7m

Real estate company denies it is in talks to sell projects to a government buyer.

Barwa Real Estate Co's net profit rose 8.25 percent in the first quarter on increased revenues from rents and services and the sale of property, the company said on Monday.

The group's net profit rose to $57.72 million from $53.3 millionin the first quarter of 2009, a company statement said. Total assets increased to $11.5 billion from $6.59 billion in the year ago period.

Barwa, which is in the process of taking over Qatar Real Estate Investment Co (Alaqaria), said in March negotiations were still underway on the sale of Barwa Financial District to Qatar Petroleum, and denied it was in talks to sell its Barwa City project to a government buyer.

Qatari Diar, the property unit of the country's sovereign wealth fund, will own at least 45 percent of the new Barwa group, which is to be formed after Barwa's takeover of Qatar Real Estate Investment Co.

Barwa is 45 percent owned by Qatari Diar, the property arm of the country's sovereign wealth fund, the Qatar Investment Authority (QIA).

Barwa, the fifth largest developer in the Gulf Arab region by market value, said earlier in April it will continue to sell assets in 2010 and 2011 to meet its obligations after it repaid $1.18 billion in Islamic financial facilities.

The developer, an affiliate of QIA, has properties in France, Switzerland and the United Kingdom and focuses on retail, office, hospitality and residential developments.

Barwa said it started leasing its project Barwa Village and expected to operate Barwa Housing "soon" as well as the first phase of Barwa Al Sadd.

It added the projects are expected to "contribute significantly to the company's operational earnings" this year.

Qatar is ensuring its key property firms weather the global crisis, which has hit nearby Dubai hard, by pushing through defensive mergers and using the real estate arm of the sovereign wealth fund to invest in them.

The Gulf Arab state, the world's largest exporter of liquefied natural gas, has said it will keep on spending to maintain growth momentum in the small Gulf Arab state, as well as acquiring overseas assets. (Reuters)