London: The British property market remains an attractive investment to Qatar, the Governor of the Qatar Central Bank (QCB) said yesterday, as he gave the seal of approval to the Gulf state's latest UK project.
Troubles in Dubai, high-profile court cases in London and the fallout from the credit crunch will have no impact on the construction of the £2 billion Shard, on the South Bank of the Thames near London Bridge, which has already reached the fifth of its 80 floors. When completed, it will be Europe's tallest building.
"The State of Qatar is firmly behind this project, which reflects our belief that the UK property market continues to offer us an attractive and stable economic environment in which to invest," Sheikh Abdullah bin Saud Al Thani, Governor of the QCB, said.
The Qatari state owns 80 percent of the development, which was designed by Renzo Piano. Irvine Sellar, the veteran property developer, retains a one-fifth stake through his Sellar Property Group.
The 310-metre tower, which will combine office space with a hotel, restaurants, shops and flats, is scheduled for completion in May 2012.
A 600,000 square feet office building, due to be completed in 2013, will be sited alongside the Shard.
Barry Ostle, a director of Sellar Property Group, said yesterday that the company had not yet begun to market the commercial space. He refused to speculate on the likely rent that the buildings might achieve.
"There is no urgent need to secure immediate pre-lettings, which is one of the principal advantages of this project," Ostle said. Lettings agents are yet to be appointed for the space.
Before construction of the Shard began, two important pre-lets were signed, with Transport for London, which will take floors four to ten of the tower, and Shangri-La Hotels, which will take floors 34 to 52.
A spokesman for Sellar Property Group insisted that the financial crisis in Dubai posed no threat to funding from the State of Qatar, whose immense wealth, based on gas supplies, can barely be estimated.
Provided that the Qatar-backed developments are completed on time, they could have the advantage of being among the first to attract tenants as the economy emerges from the recession. Some of the UK's biggest property developers, including Land Securities and British Land, have put projects in the City on hold for the past 18 months, causing analysts to speculate that there will be a squeeze on office space available to let by 2012.
While the Shard is not in the City, its proximity to London Bridge railway station and its closeness to the Square Mile are expected to make it an attractive location to prospective tenants. Investors from Qatari Diar, owned by Qatar's sovereign wealth fund, are behind the development of luxury apartments in Knightsbridge, overlooking Hyde Park. However, their project to redevelop Chelsea Barracks, also in Central London, has turned sour, resulting in a High Court dispute with Nick and Christian Candy, their long-time design partners in the UK.
© The Peninsula 2009
