As ministers and executives from around the Arab world converge on Doha this week for the 9th Arab Businessmen Forum, Qatar's booming property market is taking centre stage.
The opening of the forum on December 13 coincided with the launch of The Gate, a giant mixed-use development project located in the heart of Doha's new business district.
Upon completion, scheduled for the end of 2008, the complex will give the booming emirate a further 55,000 sq metres of office space, located in two connected buildings, plus an adjoining 24,700 sq metres of new retail and entertainment space.
The Salam Bounian Company will spend QR550m ($151m) on the project, drawing on an unspecified amount of loans and its own capital base of QR500m ($137.3m), which includes a recent QR300m ($82.3m) private equity placement, Qatar's Gulf Times reported on December 14.
The Gate kick-off also saw the developer announce contracts with a slew of local and international firms. These included Cansult for project management, Halcrow-Yolles for prime consulting, MZ & Partners for architectural concepts, Northcroft for surveying and cost control, architecture and engineering, Parsons for traffic analysis and management engineering, and Shaker Consultancy Group for electro-mechanical engineering.
Meanwhile, in a separate development, Nasser Bin Khaled & Sons (NBKS) Group appointed Amwal, Qatar's leading investment banking group, as financial advisor to its $1bn Waad City mega-project, a planned 111,500-sq-metre "city within a city".
An event co-sponsored by the Qatari Businessmen Association and the Arab Businessmen Federation, the two-day Arab Businessmen Forum has brought up to 750 political and business leaders to Doha, representing each Arab country, to talk shop about investment opportunities.
Of particular concern is spurring the growth of tourism between Arab countries, one of the few areas in the Qatari economy where growth has been more sluggish than expected in recent years.
Opening the forum, Qatar's minister of state for foreign affairs, Ahmed bin Abdullah al-Mahmoud, polished Qatar's free-market credentials by stressing the vital role that the private sector must play in the country's development, the Gulf Times reported.
The forum and recent news in the real estate sector both come within the context of Doha's preparations for the 2006 Asian Games, set for next December.
Qatar is also investing some $5.5bn into the New Doha International Airport, set for opening in 2009. The airport is being built largely on land reclaimed from the Persian Gulf by an international consortium led by Qatar Dredging Company (QDC). QDC put out a statement last month saying the project was proceeding according to schedule.
Yet the surge in demand for Qatari real estate has created a number of local problems.
With construction unable to keep pace with the market's appetite for new space, at least one city leader in Doha is now calling for the government to step in to control the rents of both residential and commercial properties, which appear to be spiralling out of control.
Abdullah Saleh al-Kuwari, a prominent member of Doha's Central Municipal Council, told the daily The Peninsula recently that the soaring rents "should be brought under control before it is too late". In particular, he took aim at property owners who were allocated land in Qatar's Industrial Area years ago, but have yet to develop the sites. These plots, he said, should be seized by the state for badly needed residential housing.
"We are in desperate need of plots of land," al-Kuwari told the paper, "especially to build residential units, since there is a severe shortage [but] if the plots that remain unused in the industrial area are confiscated from the allottees and given to other people for building purposes, the shortage can be offset."
Worsening matters is the fact that Qatar is suffering from a severe shortage of raw building materials. A cement shortage, for instance, has often caused delays in construction projects, and the dominant producer, Qatar National Cement Company (QNCC), has come under fire for not importing enough cement to make up for its lack of local production capacity. Recently, QNCC has been forced to yield its monopoly position in domestic production and imports.
A new cement producer, Gulf Cement Company, will raise capital with an initial public offering (IPO) by mid-April 2006. The firm will churn out 5000 tonnes of cement daily, adding significantly to the country's overall production capacity.
The move to establish the company was done "on a war-footing", Abdullah bin Nasir al-Misnad, the chairman of the founding committee, was quoted as saying by Gulf Times on December 5. Investors are expected to buy up 80% of the company's shares on the Qatari stock exchange in a listing that may well see new records set on the Doha bourse.