Qatari Diar must complete vital infrastructure on its Lusail City scheme ahead of the 2022 World Cup
Date established: 2004
Main business sectors: Real estate and construction
Main business regions: Qatar, Middle East
Group chief executive officer: Mohammed bin Ali al-Hedfa
Telephone: (+974) 4 497 4444
200,000: Number of residents Lusail City will house
35,000 sq km: Area covered by Lusail City
$33bn: Cost of Lusail City project
sq km=square kilometres. Source: MEED
Qatari Diar Real Estate Development Company (Qatari Diar) was established in 2004 by state-owned Qatar Investment Authority with a start-up capital of $1bn. Its remit was to invest in and develop real estate schemes and social and community projects.
Since its launch, Qatari Diar has built up assets worth more than $60bn through global investments in the real estate and banking sectors, in part by taking strategic stakes in other real estate developers and facilities management firms.
The company has a portfolio of 35 projects in 20 countries and employs 350 people worldwide. One of its biggest projects is the Lusail City development in Doha, which is designed to house up to 200,000 residents when completed.
Qatari Diar has formed several joint venture construction and facilities management firms. It signed agreements with Germany’s Hochtief in 2008 and France’s Vinci Construction in 2010.
An important local subsidiary is Barwa Real Estate Company, in which Qatari Diar holds a 45 per cent stake. Barwa’s core business activities include property development, brokerage, appraisal, property management and property investment. One of its largest projects undertaken to date is the Barwa Financial District, located in the West Bay area of Doha and which it sold to Qatar Petroleum in the fourth quarter of 2011 for an estimated $3bn.
In 2009, Qatari Diar formed a joint venture with Germany’s Deutsche Bahn to form the Qatar Railways Development Committee (QRDC). Under QRDC, the Qatar Railways Company oversees the development of Qatar’s $35bn rail network.
Qatari Diar’s financial position is underpinned by its status as a government-backed company. Due to its vast gas resources, the state enjoys enviable hydrocarbon revenues, expected to total $119.8bn in 2011.
Qatari Diar is best known for its luxury real estate schemes, both locally and internationally.
At home, the firm has acted as the master planner and developer on several major projects designed to increase the volume and variety of accommodation available and to raise the international profile of the country. These include the Lusail City scheme, which covers a total area of 35,000 square kilometres to the north of Doha and which will contain, in addition to housing, tourist attractions and the main stadium for the 2022 World Cup. Qatari Diar is also developing the Doha Convention Centre, which consists of a 104-storey tower, a 100,000-square-metre convention centre and other amenities.
In addition to its central role in Qatar’s expanding property market, Qatari Diar has been raising its international profile in recent years by taking on a number of high-end real estate schemes in prime locations. The $1bn-plus development of London’s former Chelsea Barracks is one such example.
In 2011, Qatari Diar expanded into several new markets, most notably with its estimated $700m investment in the CityCenterDC project in downtown Washington, its first major foray into the US property market.
The company is also developing schemes in countries including Egypt, Syria, Vietnam and Yemen. In November 2011, Qatari Diar signed $543.8m-worth of deals with contractors to build two projects in Egypt. The contracts allocated $464.3m to Qatari Diar’s Nile Corniche project in Cairo and $79.5m to a coastal resort development in Sharm el-Sheikh.
Construction work on the $600m Al-Rayan Hills project in Yemen began in November 2008, along with work on the $400m Musheireb mixed-use development in Sudan.
Although these developments might not seem the most lucrative of plans for a real estate developer, they reflect its desire to build up both diplomatic and economic links with poorer countries. They also offer an opportunity to cater to the needs of the local residents of these countries, who have returned home from working overseas and can afford luxury homes.
Until December 2010, when Qatar won the right to host the Fifa 2022 World Cup, the company’s focus was shifting increasingly to projects in overseas markets and progress on its $33bn Lusail City had fallen behind schedule. Now, with just 10 years left to build the infrastructure to host the world’s largest sporting event, Qatari Diar’s focus is firmly back on its home market. The firm has a critical role to play in building the infrastructure at Lusail for the event and is involved in the development of the country’s national railway.
Qatari Diar is a wholly government-owned company and therefore does not report annual profits or losses, making it difficult to assess the company on purely commercial grounds.
However, as a government-backed firm, funding its planned projects will not be an issue. The strength of its financial position is highlighted by its ambitious projects, such as the Lusail City scheme, on which few international developers would consider embarking alone.
The importance of its Lusail City scheme to Qatar’s development plans has risen since the country was awarded the right to host the 2022 World Cup. The development will accommodate the main stadium for the event, so infrastructure must be completed within the scheduled timeline to ensure that all the other necessary buildings required to host the event can be completed to plan.
Qatari Diar’s rail company will also play a significant role in delivering the planned transport infrastructure required for the event.
The firm’s decision to venture into other Middle East countries shows that it is not afraid to take risks in new markets. However, with the political unrest from the recent Arab uprisings still reverberating in Syria and Yemen, and fresh civil unrest emerging in Sudan, the short-term future of these projects may be in doubt.
Qatari Diar’s Lusail City is one of the biggest commercial projects in the Middle East. Located 22 kilometres north of Doha, the scheme covers a total area of 35,000 square km and is planned to house up to 200,000 people.
Qatari Diar set up a subsidiary, the Lusail Real Estate Development Company, to develop the project. German contractor Hochtief has been assigned to provide planning and construction services.
The Lusail project will be executed in phases over the next 10 years and will contain residential clusters, commercial districts, shopping and leisure facilities and two golf courses. The master plan divides the waterfront development into 19 integrated and mixed-use districts.
Large sections of the Lusail scheme have been sold to different investors to build a variety of real estate projects.
Diyar al-Kuwait is one international developer that is set to build a mixed-use scheme on Lusail. In March 2010, it appointed the local office of Kuwait’s KEO International Consultants to design and manage the construction work on the $800m development. It will be located on the southeast corner of Lusail, known as the Marina District.
The Lusail City development is a key part of Qatar’s World Cup plans and will include the Lusail Iconic stadium
The Lusail scheme was designed at the onset of the Gulf construction boom in 2004 and the first contract was awarded to China’s Sinohydro in 2006 for the initial marine, earthworks and site preparation. However, the project has progressed slowly since then.
The lack of progress has been attributed to a combination of the effects of the global recession on the region’s property market and state spending being prioritised elsewhere.
However, Qatar’s success in winning the right to host the Fifa World Cup in 2022 has given a boost to the scheme. The Lusail development is a key part of Qatar’s World Cup plans and will accommodate the Lusail Iconic stadium, the largest planned sports arena for the event, with the capacity to hold more than 80,000 people.
Qatari Diar now has a finite deadline by which it needs to complete all the infrastructure on the development, so that contractors have access to build the facilities required for the tournament. Progress has been made on several key transport and infrastructure projects planned for the Lusail scheme.
In the first week of 2012, South Korea’s Samsung C&T Engineering & Construction Group was awarded a $296m contract for one of the primary roads on the development. Samsung will build a 10.7km road with a 1.5km underground motorway, which will serve as the backbone of the city’s transport system.
Qatar’s Public Works Authority is also moving ahead with infrastructure schemes to link Lusail to Doha. The authority has received bids for the first package on the Lusail Expressway, which will have 16 lanes. The second package, which has not yet been tendered, will run beside the Lusail scheme and on to the Pearl real estate development. The expressway will be about 12km long when complete.
In addition to road links, the Lusail project will have a light rail transit (LRT) to transport people around the development. The LRT will run for 22km and will include 34 stations. In April 2011, the US’ Parsons and Aecom signed a five-year deal with Qatar Railways Development Company to provide project management and consultancy services for the LRT network.
In August 2011, Qatari Diar Vinci Construction, a joint venture between Qatari Diar and France’s Vinci Construction, was awarded a $535m civil engineering deal for the LRT scheme.
There has also been noticeable progress on some of Lusail’s real estate projects since Qatar was selected as a host for the 2022 World Cup at the end of 2010.
In April 2011, UAE-based developer Damac Properties awarded three contracts worth a total of $164m to the local Draieh Contracting for construction work on three mixed-use developments on the Lusail scheme. Draieh will be working on the Business Square, Piazza 1 and Piazza 2 developments. Construction work on the scheme has begun and the project is moving forward on schedule.