State-owned firm plans to raise QR9bn by 2013-end to complete the QR20bn Musheireb project
Dohaland, the state-owned company redeveloping part of Qatar’s capital, plans to raise as much as QR9bn ($2.5bn) by the end of 2013 to complete the project, its chief executive officer said.
The QR20bn Musheireb project includes the construction of four government buildings in one of the oldest parts of Doha as well as shops, a hospital and a heritage centre. It will be built in six phases, with the first completed in 2012 and the last in 2016.
“We are looking at providing our own financing” after the first two phases are finished, CEO Issa Al Mohannadi said in an interview. “There are many options we are considering now and it could be a combination of a number of things,” such as bonds or loans, he said.
Qatar, holder of the world’s third-largest natural gas reserves, is investing in infrastructure and development as it prepares to host the 2022 Soccer World Cup. The Gulf country is also aiming to provide housing for a population projected to rise by about 50 percent to 2.6 million by 2030.
Musheireb, which covers 350,000 square meters (3.8m sq ft), is owned and initially financed by state- controlled Qatar Foundation, chaired by the Qatari Emir’s wife, Sheikha Mozah Nasser Bint Nasser Al Missned.
“We are looking at our shareholders to fund us in the beginning, but after that we hopefully will fly solo,” Al Mohannadi said. “We will need the financing by the beginning of 2014 or end of 2013,” he said.
The cost of borrowing has soared for the six countries in the Gulf Cooperation Council, which includes Qatar, after political unrest spread from Tunisia and Egypt. Yields on GCC bonds rose 84 basis points to 5.888 from Jan. 25, when Egypt’s protests began, through March 17, according to the HSBC/NASDAQ Dubai GCC Conventional U.S. Dollar Bond Index.
Bond sales from the group rose to $5.5bn so far this year from $778m in the same period last year. Emaar Properties, the largest developer based in the UAE, raised $500m in Islamic bonds on January 17.
Dohaland will award QR6bn worth of contracts in the next few years as construction on the project progresses, the CEO said. So far, 30 percent of work has been completed on the first phase and six floors have been built on the main buildings, he said.
Hyundai Engineering & Construction Co. and a joint venture partner HBK Contracting Co. were awarded QR1.56bn contract to build the first phase of the project on April 25.
Four hotels, including one operated by the Mandarin Oriental International Limited, will be built in the development, creating 900 rooms. Buildings to house the Emiri Court, Emiri guards and the National Archive are also under construction, the CEO said. A heritage center and museums will be erected while structures from before 1947 will be kept as a reminder of the past.