DUBAI, 3 January 2008 — Industries Qatar, Qatar’s biggest firm by market value, said yesterday it would set up a 1 billion riyal ($274.8 million) property firm with partners, allowing it to tap growth in the country’s real estate market.
Industries Qatar, a conglomerate that operates mainly in the chemicals and steel sectors, would own one-third of the new company, while Qatar Real Estate Co and Kuwait’s Al-Koot Insurance and Reinsurance Co would each on 33 percent.
The real estate firm, which will start operations in the first quarter, would build, manage, buy and sell residential, commercial and industrial towers, Industries Qatar said in a statement on the Doha bourse website.
“The move into real estate is positive because it’s an indication of the company’s high liquidity surplus and gives the impression they have reached their full capacity in their core field,” said Samer Al-Jaouni, head of international brokerage at Ahli Bank.
Qatar is the world’s biggest exporter of liquefied natural gas and its economy could grow 9.9 percent this year, the fastest pace in the Gulf Arab region, a Reuters poll of 12 economists showed last month.
The Gulf state is investing record revenues from energy exports to develop infrastructure, tourism and financial services.
The country is facing a shortage of properties, a key contributor to inflationary pressures.
Annual inflation in Qatar accelerated to 13.73 percent at the end of September, just below a record, as accommodation costs in the Gulf Arab state jumped nearly 29 percent.
Qatar has the world’s third-largest reserves of natural gas, which Industries Qatar uses to help make its chemicals and fertilizers.
Profit growth at the firm’s Qatar Steel Co, Qatar Petrochemical Co and Qatar Fertilizer Co helped Industries Qatar post its second consecutive record profit in the third quarter.
“The impact on its shares would not be immediate, but I expect them to rebound about 5 percent more starting from the second part of January,” Jaouni said.