Harrods adds to Qatar's mixed bag of assets

8th May 2010, Comments 0 comments

Qatar's acquisition of London's luxury department store Harrods in a deal reportedly worth 1.5 billion pounds (2.2 billion dollars) adds to the gas-rich Gulf state's diversified assets abroad.

Egyptian billionaire Mohamed Al Fayed has sold Harrods to Qatar Holding, one of Qatar's investment arms, Fayed's advisors Lazard announced on Saturday.

Qatar Holding LLC is the main investment arm of the Qatar Investment Authority (QIA) which is charged with investing and managing the oil and gas-generated wealth of Qatar and diversifying its finances.

QIA chief executive officer Sheikh Hamad bin Jassem al-Thani, a royal, is also the Arab emirate's premier and foreign minister.

In March, Sheikh Hamad said that the sovereign wealth fund invested 30 billion dollars in 2009 and was looking to invest a similar amount this year.

The wealth of QIA, which was established in 2005, is estimated at 65 billion dollars, according to the SWF Institute.

The Qatar Holding division now controls a 17-percent stake in German carmaker Volkswagen, as well as a seven-percent share in the British bank Barclays.

Along with Abu Dhabi, Qatar largely backed a seven-billion-pound (10.4 billion dollars at the current rate) capital injection in Barclays in 2008 as the bank sought to survive the credit crunch without government aid.

But Abu Dhabi has since sold most of its holding, while Qatar Holding remains the largest shareholder.

Qatar Holding also controls a 14.7-percent share in the Canary Wharf development in east London's Docklands, which houses the offices of major banks and media and newspaper groups.

It also holds a 15-percent share in the London Stock Exchange.

Through its Delta Two investment-vehicle, QIA also holds a 25-percent stake in British supermarket chain Sainsbury's.

In July 2007, Delta Two launched a bid for Sainsbury's that valued the supermarket group at 10.6 billion pounds (15.7 billion dollars currently). But it abandoned the bid four months later, citing poor global credit markets and a wrangle over pensions.

Qatar also owns the building which the houses the US embassy in London.

In November, it was announced that Qatari Diar, QIA's property investment arm, had bought the building which dominates Grosvenor Square in central London but without disclosing the value of the deal.

The US mission is vacating the building in 2017 when new premises are ready.

Qatari Diar also bought London's Chelsea Barracks from the British ministry of defence in January 2008 for 959 million pounds (1.4 billion dollar at the current rate).

Qatar owns several other assets, mainly real estate, across Asia and Europe.

The Gulf state's 900 trillion cubic feet (25 trillion cubic metres) of natural gas reserves are the third-largest in the world, and it pumps around 800,000 barrels of oil per day.

It has a small population of 1.67 million inhabitants, according to 2009 official estimates, of whom only 200,000 are Qatari nationals.

© 2010 AFP

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