Qatar real estate hit hard ahead of World Cup

Qatar real estate hit hard ahead of World Cup
A general view of the Corniche Towers is seen in Doha, Qatar February 5, 2019. Picture taken February 5, 2019. (File/Reuters)
Updated 15 February 2019

Qatar real estate hit hard ahead of World Cup

Qatar real estate hit hard ahead of World Cup
  • Qatar plans to increase residential space by about 50 percent and office space by 40 percent in the next three years
  • The lion’s share of construction underway is for high-end residential towers, white-collar office space, and luxury hotels and shopping malls

DOHA/DUBAI: Qatar’s Doha Tower, a spike-tipped cylinder that glows orange at night, won an award when finished in 2012 amid a Gulf-wide real estate boom, but today about half of its 46 floors are empty.
The office tower, now a familiar part of the capital’s high-rise skyline, has run foul of what real estate brokers, bankers and analysts say is an oversupplied Qatar property market ahead of the 2022 World Cup that mirrors a real estate downturn in the wider Gulf region after a drop in oil prices.
Qatar has the added challenge of a diplomatic, trade and transport boycott imposed on the Gulf Arab state by Saudi Arabia, the UAE, Bahrain and Egypt over allegations that Doha supports extremist militants, a charge Qatar denies.
The protracted row has made it tough to lure would-be foreign buyers of residential or commercial space.
Residential prices are down about 10 percent from June 2017, when the boycott began, and office prices have fallen by a similar rate, according to analysts and economists. Rents are down 20 percent from three years ago, they say.
“Qatar’s property sector has been one of the main casualties from the blockade that was imposed in mid-2017,” Jason Tuvey, an economist at Capital Economics, said.
The property downturn has so far not translated into bad loans, as bankers say borrowers holding sluggish real estate assets tend to be among the country’s wealthiest.
“They have capacity to withstand the market ... I don’t see a major threat,” Doha Bank CEO Raghavan Setharaman said, when asked about his view of the real estate market.
A banker at Al-Khalij Commercial Bank said banks like his have been restructuring many property loans in recent months, extending them to 20-year payment periods from 10 in some cases, to keep business moving for developers hit by slow demand.
But with the World Cup edging closer, real estate experts say long-planned projects are now set to flood the market, even as buildings in prime locations, like Doha Tower, sit idle.
“It’ll be interesting to see what happens when they (real estate prices) are really put under pressure in a year’s time, when a lot of new supply hits the market,” Johnny Archer, Associate Director of DTZ, a Doha-based real estate firm, said.
Tiny but wealthy Qatar plans to increase residential space by about 50 percent and office space by 40 percent in the next three years, partly on expected demand from the World Cup, according to a report published last week by real estate company DTZ.
The lion’s share of construction underway is for high-end residential towers, white-collar office space, and luxury hotels and shopping malls.
FIFA requires Qatar have at least 60,000 hotel rooms in place for the month-long World Cup tournament, which Qatar estimates will draw about 1.5 million fans — more than half of its roughly 2.6 million population.
Qatar has about 26,500 rooms and will add another 15,000 by 2022, DTZ’s report estimated. The rest will be met by rooms aboard cruise ships and in desert camps, according to the local World Cup organizing committee. These camps are expected to be bedouin-style accommodation to give visitors a taste of desert life.
Much of the building is in an entirely new city, Lusail, a 38-square kilometer stretch just north of Doha dotted by commercial towers, hotels, and shopping centers at various stages of construction.
Lusail is being developed by state-controlled Qatari Diar Real Estate Company, which envisions it hosting 200,000 residents and 170,000 employees. It is anchored by Qatar’s largest World Cup stadium, an 80,000 seat venue that will host the opening and closing matches.
Colliers International, whose office was an early entrant to Lusail, says getting companies to fill a rush of towers coming online ahead of 2022 will be a daunting task.
“There’s going to be massive structural oversupply for office infrastructure for the foreseeable future,” said Colliers’ Qatar country director Adrian Camps.
In a bid to spur activity, Qatar last month ratified an investment law allowing foreigners full ownership of companies, and for years Qatar has designated certain high-end areas like Lusail open to foreigners, but brokers say demand remains low.
Shopping malls, lacking the Saudi or Emirati shoppers who once flocked to them before the boycott, are among the most visibly affected, with some having to shutter shops in recent months.
New malls are being built anyway.
Total retail space has doubled in three years and will grow 50 percent more by 2021 with nine new malls, according to DTZ.
Beyond 2022, Qatar real estate faces an uncertain outlook. Aside from soccer stadiums, Qatar has not specified legacy plans for what happens to infrastructure developed for the World Cup after the tournament.
“There’s too much uncertainty as to where that demand specifically is going to come from,” Richard Rayner, who surveys property for DTZ said.


King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
Updated 55 min 44 sec ago

King Salman Energy Park signs anchor tenants

King Salman Energy Park signs anchor tenants
  • President and CEO of SPARK Saif Al-Qahtani: SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations
  • By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product

RIYADH: King Salman Energy Park (SPARK), the Dammam-based project backed by Saudi Aramco, added two new anchor tenants on Thursday, the Abu Dhabi National Energy Company (TAQA) and AMCO.

President and CEO of SPARK Saif Al-Qahtani said: “SPARK is proud to welcome TAQA and AMCO as they take the first step toward launching their operations. SPARK sits at the heart of the energy market, offering a world-class ecosystem that facilitates the growth of our tenants’ businesses and brings sustained value to our wider communities. SPARK is set to be a fully integrated city, bringing together major national and international companies and fuelling economic growth and job creation.”

TAQA will expand its local operations with the TAQA Industrial Park at SPARK, including a new facility for oilfield services, a specialist unit for engineering and manufacturing, and a wireline and perforation center of excellence.

The facilities will be constructed in two phases starting in the second quarter of 2021, with the design and developmental planning stages having already commenced.

TAQA CEO Khalid Nouh said: “With our plans for future acquisitions focused on cutting-edge technology and innovative solutions, we further cement our alignment with Vision 2030 and the government’s drive to diversify and localize services and manufacturing in the Kingdom.”

AMCO is investing over SR260 million ($69.33 million) in a new center at SPARK. Its plans include the development of facilities to enable the manufacturing and production of steel pipes, valves, pumps, turbines, and machine and rotary equipment.

AMCO’s facilities will be developed in three phases, allowing for the gradual build-up of manufacturing capabilities and onboarding of local talent.

By 2035, the park is expected to contribute more than SR22 billion to the Kingdom’s gross domestic product, provide up to 100,000 direct and indirect jobs and localize more than 350 new industrial and service facilities.


STC partners with Irish software firm to develop in-car applications

Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
Updated 4 min 3 sec ago

STC partners with Irish software firm to develop in-car applications

Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers. (Supplied)
  • As a result of the link up, the software will then also allow STC to easily add a range of in-car services to Saudi vehicles

RIYADH: Saudi Telecom Co. (STC), the Kingdom’s largest mobile network operator, has entered into a partnership with Irish vehicle software firm Cubic Telecom to develop in-car software solutions for Saudi drivers.

As a result of the link up, the software will then also allow STC to easily add a range of in-car services to Saudi vehicles, including an emergency call system which automatically alerts healthcare services in the event of an accident.

Gerry McQuaid, chief commercial officer at Cubic, told Arab News: “Basically we partnered with STC as a premier car integrity partner in Saudi Arabia. We are enabling the customer to benefit from a range of safety, entertainment, and navigation features when they purchase the car.”

Similar to every market, Saudi Arabia had a strict range of regulations for how connectivity was managed, he said, adding that the software partnership would make it easier for features to be added by carmakers and third-party developers.

“I can’t give a precise date, but in a not-too-distant future you actually don’t need a driving license, the car will actually drive autonomously for the citizens. That is the big difference,” McQuaid said.

“Already software solutions can support this capability, but it does need important regulations to be introduced to start with semi-driving.

“You can request the car on your smart phone, and it will drive to you to get in and the car will drive to your destination. You can listen to music, do some work, and have a conversation while the car drives. This is not science fiction,” he added.

Soon cars will have a whole range of applications, such as an iPhone or other smart phone, with touchscreen interaction and voice regulations, and people will interact with the car from outside using smart phone apps, he said.

On safety regulations, McQuaid pointed out that solutions included an “emergency call” system which would automatically alert emergency services in the event of an accident, give details about the incident, and suggest if it required attention.

Barry Napier, CEO of Cubic Telecom, said: “We are delighted to be working with STC to help car manufacturers activate new opportunities in a very significant market.”

Dr. Sultan bin Saeed, STC’s vice president of business development, said: “Partnering with Cubic enables STC as a digital enabler to simplify the delivery and management of advanced in-car services and gives us a foundation for innovating and meeting the changing needs of customers as new services evolve.”

Cubic Telecom provides connected software solutions in more than 5 million vehicles and devices to at least 100 countries and has already partnered with some of the Gulf region’s largest mobile operators.


Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
Updated 59 min 24 sec ago

Saudi Arabia to ship gas to South Korea and take CO2 back

Saudi Arabia to ship gas to South Korea and take CO2 back
  • Hyundai to take LPG cargoes
  • CO2 sent back to use in oil fields

RIYADH: Saudi Arabia plans to ship gas to South Korea where it will be used to make hydrogen, and the carbon dioxide produced in the process will be transported straight back to the Kingdom, Asharq reported, citing Bloomberg.

Hyundai Oil Bank Co. will take liquefied petroleum gas cargoes from Saudi Aramco and convert them into hydrogen, to use for chemical and power solutions, the Korean energy company’s parent Hyundai Heavy Industries Holdings Company said.

Aramco and Hyundai OilBank Co. agreed in the deal signed on Wednesday, that the carbon dioxide emitted in the hydrogen-making process will be transported back to Aramco, to use it in its oil production facilities, according to a Hyundai Heavy spokesman.

“It seems the project will bank on the idea that shipping LPG to Korea and carbon dioxide back to Saudi Arabia will be cheaper than shipping hydrogen to Korea,” said Martin Tengler, BloombergNEF’s lead hydrogen analyst.

Saudi Aramco has huge quantities of natural gas, which it has identified as a key area of expansion for domestic supply and export in the form of liquefied natural gas (LNG).

“We basically look at natural gas as an area for growth for the company,” Khalid Al-Dabbagh, Aramco’s chief financial officer, said in an investor call in the run-up to its successful IPO back in 2019.


GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering
Updated 04 March 2021

GRAPHIC: From Beirut to Damascus currencies take a battering

GRAPHIC: From Beirut to Damascus currencies take a battering

Lebanon’s president this week ordered the central bank governor to open an investigation into currency speculation, after the Lebanese pound plunged to record lows on the black market.
But the battered Lebanese pound is not alone among regional currencies that have been decimated by the impact of the pandemic and other factors.
The Syrian pound also fell to a record low on the black market this week, dragged down by its close commercial and banking ties with Lebanon.
“Businessmen and traders are fretting over fears of a free-fall in coming days and watching if unrest grows in Lebanon and its impact on dealings since Lebanon is our lifeline to the outside world,” said one Damascus-based trader told Reuters, who requested anonymity.


Oil prices rise after Saudi minister urges caution on market

Oil prices rise after Saudi minister urges caution on market
Updated 04 March 2021

Oil prices rise after Saudi minister urges caution on market

Oil prices rise after Saudi minister urges caution on market
  • OPEC and allies meet today
  • Oil price rises ahead of meeting

LONDON Oil prices rose more than $1 per barrel on Thursday after Saudi Energy Minister Prince Abdul Aziz bin Salman urged caution and vigilance at the beginning of a meeting of OPEC ministers and their allies about the future of supply cut
Brent crude futures were up $1.11, or 1.7 percent, at $65.18 a barrel while U.S. West Texas Intermediate (WTI) crude rose $1.07, or 1.8 percent to $62.35.
Ministers from OPEC members and their allies started a meeting to discuss the future of an oil output cut at 1300 GMT.
Analysts and traders say a four-month price rally from below $40 a barrel is now out of step with demand and that physical sales are not expected to match supply until later in 2021.
In the United States, despite a record surge of more than 21 million barrels in crude oil stockpiles last week, gasoline stocks fell by the most in 30 years as refining plunged to a record low because of the Texas freeze.