Qatar top sovereign Europe property buyer with 6 weeks gas cash

LONDON Fri Aug 17, 2012 3:48pm IST

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LONDON Aug 17 (Reuters) - Qatar was the top sovereign wealth buyer of European property in the last 12 months, spending 3.5 billion euros ($4.3 billion) on eight deals including the London Olympic athlete's village and a mall on Paris' Champs Elysees, data from a research firm showed.

For Qatar, the world's biggest exporter of liquefied natural gas (LNG), that spending during the year to mid-August equals only about six weeks of revenue from its LNG exports, according to Reuters calculations.

Sovereign wealth funds view top-quality property in the best locations as a safe bet in the global financial crisis.

"For sovereign wealth funds like the Qatar Investment Authority (QIA), property deals are about wealth preservation, not returns," said Joseph Kelly, director of market analysis at Real Capital Analytics (RCA).

"They have a lot of money to spend, so deals tend to be big and in the cities they know well."

Gas market traders estimate that Qatar, with a native population of about 250,000, earned $36 billion in LNG revenue in 2011, though an exact figure is hard to obtain from available data.

Qatar was beaten into second place as the biggest overall property investor in Europe by private equity giant Blackstone , which spent 4 billion euros on 19 deals, which included office blocks and industrial units, the RCA data showed.

The QIA, the most active Middle East sovereign wealth fund in recent years, has spent 5.7 billion euros on real estate since 2007, almost 80 percent of it in London and Paris, RCA said.

SHARD, HARRODS, CANARY WHARF

Qatar funded development of the European Union's tallest skyscraper, the Shard, which opened in London last month.

It also owns Harrods department store and a 27 percent stake in Songbird Estates, the majority owner of London's Canary Wharf financial district.

The QIA also has bought stakes in companies ranging from German sports car maker Porsche, Barclays and luxury goods house LVMH as it has sought to diversify economic risk.

It has more than $30 billion to spend on investments this year alone and its spending strategy has been opportunistic, an executive board member said in April.

"We have no asset allocation or geographic allocation. After the financial crisis, all that went in the garbage." Hussain al-Abdulla said. Asked whether the fund had assets worth $100 billion, he said, "much more".

The sovereign funds of Malaysia and Norway were among those also active in European real estate. The latter owns half of famous London shopping strip Regent Street and is nearing a $1.7 billion-plus deal for a majority stake in the Meadowhall shopping centre in north England.

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