If Qatar sells off a lot of London property, a tornado is going to hit the British economy. This year’s Qatar World Cup has seen a lot of strife from the green field to the field of fame and fortune. Qatar has been boycotted by Western countries before the opening of the World Cup through various “human rights issues”. This time is really a bit annoyed.
Transport of London announced a total ban on Qatari advertising on London’s buses, tubes and cabs in protest of Qatar’s World Cup ban on European teams wearing “rainbow armbands”.
Qatar said it was “reviewing current and future investments in London” and was “considering investment opportunities in other UK cities and former British dominions” in retaliation.
Qatar is really not bragging when it says this.
【1】The biggest landlord in London
Qatar is one of the biggest investors in London. It also pledged to invest £10 billion in the UK over the next five years in areas such as technology, healthcare and infrastructure originally this year in May.
Over the past 20 years, Qatar has bought a number of London landmarks: Harrods, the Shard, the Savoy Hotel, the London Olympic Village and many more in over the past 20 years. Qatar became the largest “landlord” in London in 2019. It holds over 26 million square feet of property.
Qatar has more real estate than the Queen of Britain plus the London Transport Authority owned at the time when she was still alive. In addition to real estate, it is also the biggest shareholder in Barclays Bank, London Stock Exchange, British Airways and Heathrow Airport, and it also holds 50% of Canary Wharf Group (jointly with Brookfield Canada)
The Qatar Investment Authority spent almost £1.5 billion to acquire a 95% stake in the Shard to prevent it from becoming a building in disrepair in 2008. The investment in London is just a drop in the bucket of Qatar’s vast overseas assets.
Qatar wholly acquired Valentino. Qatar is the biggest shareholder of Deutsche Bank and it is the third largest shareholder of Volkswagen.
Qatar’s threat to retaliate against the UK is not really bragging.
【2】 Qatar Investment Authority with more than $460 billion
Although the country of Qatar is small, its wealth is surprisingly large. Qatar Investment Authority which is a Sovereign Wealth Fund holds more than $460 billion to make profit for Qatar.
A Sovereign Wealth Fund is simply public wealth that a country’s government controls and dominates. It uses that money to invest and make more profit. Although it‘s not as famous as the Abu Dhabi Investment Authority, Qatar Investment Authority is to make investment behind many of the companies.
For example, Elon Musk’s acquisition of Twitter. Qatar Investment Authority provided $375 million as an investor. The Qatar Investment Authority, with more than $460 billion in assets, is the 9th largest sovereign wealth fund in the world, according to public reports. The asset allocation includes credit, fixed income investments, real estate, infrastructure, private equity and other alternative investments. 50 to 55% of the asset allocation is concentrated in private and public equity.
In addition to its investments in Europe, QIB has over $30 billion in the United States, mainly in the real estate and infrastructure sectors.
In Asia, Qatar has recently invested in 30 residential buildings in Japan, as well as in high-tech, new energy and electric vehicle industries. Qatar’s investment in China has also reached $10 billion since 2016.
【3】Why Qatar continue to invest globally even wealth enough ?
The International Monetary Fund projects that Qatar’s GDP per capita will reach $82,887 in 2022, ranking 5th in the world.
Qatar is one of the world’s largest exporters of natural gas. It is one of the richest countries in the world despite of its small size. The oil and gas industry make Qatar become the richest country in the world. Why is Qatar going to hold the World Cup 2022? Why it runs around the world looking for projects to invest in?
Qatar was poor, Qatar’s mainstay industries were pearl gathering and trading before oil and gas were discovered. Especially after being colonized by the British in the 19th century, natural pearl harvesting was the almost sole livelihood of Qataris in order to satisfy the wealthy Anglo-American industrial class.
Japan invented artificial cultured pearls before World War II, and even this only industry in Qatar was killed off.
Qatar was a small and poor country until 1971, when it broke away from colonial rule and established itself as a nation. It was only with the discovery of oil and natural gas that Qatar became rich. It rely on its resources and global economy to become one of the richest countries in the world.
Qatar understands that there are still enough resources to win for decades. There is no guarantee that it will not repeat the mistakes of the year pearl picking by single economic model.
【4】Rich, not capricious
We have money, but we can’t buy globally. Our own country still has to be built, our own economy and industry still has to be developed.
Let’s take a look at the most expensive Qatar 2022 World Cup .
Qatar has amassed astronomical costs of around $220 billion. The GDP of Qatar in 2021 is $179.6 billion. Qatar spent more than a year of the country’s GDP to host a World Cup in other words. Qatar expects that the football fans and visitors will bring in $17 billion during the World Cup tournament.
The calculation shows World Cup tournament is losing money at all. However, the bulk of this money is invested in infrastructure development.
New local facilities include air-conditioned stadiums, metro light rail, airports, shopping malls, hotels. It has even built the small seaside village of Al Lusail into the second largest city in Qatar because of the World Cup.
Some agencies have predicted that these inputs are expected to generate $240 billion in revenue and create more than 1.5 million new jobs for the Qatari economy by 2025 with concentrated in the construction, real estate and hospitality sectors.
Qatar’s tourism industry has been rising rapidly in recent years. Qatar will host the Asian Cup for the third time next year. The experience of these venues, transportation, accommodation and management will help them to host more international tournaments in the future.
Qatar wants to create the new industry of sports and tourism. Back in 2014, the Qatar Tourism Authority released the Qatar National Tourism Strategy 2030, which proposes to promote Qatar as the fastest growing tourism destination in the Middle East, aiming to increase the share of tourism to 8% of GDP by 2030.
A look back the Qatar Investment Authority shows that they are buying luxury brands, airports, airlines, and luxury hotels in a planned way.