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Mon 27 Mar 2017 02:08 PM

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Qatar says poised to announce major UK investment deals

Prime minister Sheikh Abdullah is leading a delegation of more than 400 officials and business executives to London and Birmingham

Qatar says poised to announce major UK investment deals
Qatars Prime Minister Abdullah bin Nasser bin Khalifa Al Thani. (ADEM ALTAN/AFP/Getty Images)

Qatar said it will announce major new investments in the UK this week, deepening the countries’ trade ties as London prepares to quit the European Union.

The emirate’s prime minister, Sheikh Abdullah bin Nasser bin Khalifa Al-Thani, is leading a delegation of more than 400 officials and business executives to London and Birmingham to a two-day meeting with UK counterparts, according to government statements.

The visit concludes on Tuesday, a day before UK Prime Minister Theresa May plans to start the two-year clock on Brexit negotiations by invoking Article 50 of the Lisbon Treaty.

“Transforming the country into a global centre for knowledge-based industries and innovation is one of the most vital goals of the state of Qatar,” Al-Thani said in a statement that disclosed planned investments without giving details. The emirate looks to cooperate with the British government and UK firms to achieve that goal at a time when the UK “sets a course as Global Britain,” he added.

Qatari investments would help to cushion the economic fallout from Brexit on both sides. Ahead of the break, the UK is taking steps to maintain foreign investments, going as far as to provide written assurances to Nissan Motor Co. in an effort to stem competition from other EU members that want to poach talent and capital.

Big Stake

Qatar, too, has a big stake in keeping the UK economy and asset prices strong during and after Brexit. It’s the world’s biggest producer of liquefied natural gas, and delivers 90 percent of the UK’s imports of the fuel. The emirate stepped in to invest billions in Barclays Plc during the global financial crisis and has built up a stock and real estate portfolio worth more than 40 billion pounds ($50 billion) over the past decade.

The delegation to the UK this week includes chief executive officers of Qatar Investment Authority, Qatar Petroleum and Qatar Airways.

“Qatar doesn’t see Britain leaving the EU as impacting their relationship and it may be an opportunity for it to be stronger,” Rachel Pether, an adviser at the Sovereign Wealth Fund Institute, said in a phone interview from Dubai on March 22.

Protecting the value of Qatari assets in the UK - which range from Harrods department store, a stake in J Sainsbury Plc and tony properties such as Savoy Hotel and the Shard skyscraper - isn’t the only motivation behind the emirate’s road show. Lower oil prices have sapped government revenue, forcing Qatar, the richest country in the world on a per-capita basis, to issue $9 billion bonds in May. Officials are seeking more investment flows as the country diversifies its economy away from oil and gas and continues a $200 billion infrastructure upgrade before the 2022 World Cup.

“We want to attract institutional money from the UK, especially through our forthcoming exchange-traded fund that will list on the Qatar Stock Exchange,” said Fahmi Alghussein, CEO of Doha-based asset manager Amwal LLC, who plans to attend the London trade event.

One indicator of Qatari appetite for investment in the UK is continued purchases of real estate, both by the state fund and individuals. Foreign investors see the top end of London’s property market as an attractive haven, with the pound’s slump offsetting political uncertainty, according to Laurence Ronson, sales director at Ronson Capital Partners.

“London looks like exceedingly good value in terms of a weakened sterling,” Ronson, who is developing two luxury buildings in the capital, said in an interview in Doha on March 23. “We’ve seen that with Chinese, Middle Eastern and American money looking at opportunities. All the doom and gloom that has been predicted post-Brexit has not happened. In fact, the economy is growing.”

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