Barwa building up a sizeable portfolio

The Barwa Real Estate Company was formed in late 2005 and a stake of 55 per cent, worth more than $300 million, was offered shortly afterwards in an IPO which generated more than 200,000 shareholders. Fellow Qatari real estate developer, the state-owned Qatari Diar, holds the remaining 45 per cent. Since its launch, the firm has been very quick to reveal a smattering of developments and real estate acquisitions.

Several mega deals

Within Qatar itself, Barwa has laid the groundwork for a number of sizeable projects. Its most ambitious domestic project to date was unveiled just over a year ago and involves the construction of a residential and tourism community in Al Khor. Indeed, Barwa bought the land for the venture from major shareholder Qatari Diar and the development was originally expected to cost just under $1.4 billion, although it is now believed this has subsequently risen. The project will cover well over 55 million square feet and it is hoped that, on completion, it will house around 60,000 people.

Less than six weeks ago, Barwa tied up a deal with German contracting outfit Bilfinger Berger for a new $1.3 billion residential venture called Barwa City which will occupy 27 million square feet in Doha. This project is largely geared at the top-end of the market and will be built in two phases. The first phase will see the construction of 6,000 residential units, while the second phase will comprise around 2,000 more units plus essential amenities such as a hospital, banks and retail outlets. When this development is ready, around three years from now, it should be able to accommodate 35,000 people.

But, as if these projects were not enough for a firm barely 18 months old, Barwa also has several other irons in the fire in Qatar including the $962 million Commercial Street which will be a mixed use venture of commercial offices, retail outlets, apartments and exhibition space.

Ambitions abroad

Barwa has also approached its overseas investment policy at a similar breakneck speed. In the same week that it unveiled details of its Barwa City scheme, the firm announced a tie-up with Luxembourg's Rosbud Hotels Holding and the Banque de Patrimoines Prives Geneva. The three firms will work together to develop seven hotels in Switzerland and Belgium over a period of three years and at a cost of around $125 million. Once the project is complete, Barwa may well look for an exit strategy.

But, almost inevitably, this is not all. The firm has made it through to the final round of bidding for a major coastal urbanisation project in Monaco which will cost up to $13.5 billion and Barwa is expected to submit its plans for the project in the autumn. Only a few days ago, the company paid $327 million for seven residential towers currently under construction in Ajman in the UAE, while it has also recently acquired a convention centre in Paris for more than $500 million, which it intends to convert into retail outlets and apartments. Last year Barwa also committed to developing a resort in Croatia.

The firm is focusing a significant proportion of its overseas investment on Egypt and last August it revealed a plan to build a city in the Qatamiyah area costing around $1.4 billion. Just last month, Barwa revealed it had bought 80 million square feet of land in New Cairo for more than $1 billion and it will build malls and residential units on part of the plot and sell the rest for a profit.

More altruistic aims

With multi billion dollar schemes sprouting up at a phenomenal rate, it might seem surprising that one of Barwa's most important projects has rather more humble ambitions. The firm is currently in the process of building 2,000 low-cost homes on the outskirts of Doha. Barwa has fixed the maximum rent on a three bedroom unit at the development at QR3,500 a month, which is half the going rate at the present time, according to The Peninsula. Both nationals and expatriates can apply to take possession of the two and three bedroom apartments, which should be ready in about 12 months.

As inflation, now touching 15 per cent according to the latest estimates, and rents both continue to spiral out of control in the tiny Gulf state, Barwa's significant concession to supporting lower income groups in Qatar shows that the firm's gaze is not solely fixed on drawing up a collection of large-scale ventures across the Middle East and Europe.