Dubai: Qatar Investment Authority, the Persian Gulf country’s $60 billion (Rs2.4 trillion) sovereign wealth fund, plans to invest in real estate projects in Asian cities and said it’s considering buying distressed US property assets.
“We are focusing on prime cities in India, China, Singapore, Korea, Vietnam and Malaysia, cities around the world where there is strong GDP growth and fundamental unmet demand for high quality real estate,” Navid Chamdia, head of real estate at Qatar Investment, said in an interview at a wealth funds conference in Abu Dhabi late on Monday. “About 40% of our real estate investments will be in Asia.”
The Qatar Investment Authority has been investing in property in the past two-and-a-half years to diversity its holdings. The investments, either in developing new property or renovating existing buildings, will be made mainly through joint ventures with local partners, and they will have a long-term holding period of at least seven to 10 years, Chamdia said.
With a population of less than 1 million, Qatar owns the world’s third biggest natural-gas reserves and 1.3% of global crude oil reserves. The emirate’s sovereign wealth fund manages $60 billion for the state, Citigroup Inc. analysts including Carsten Stendevad estimated in an October report. It holds stakes in the London Stock Exchange and Credit Suisse Group.
Qatar Investment Authority last week bought a 27% stake in a Vietnamese property fund, Dragon Capital, which will buy into offices and serviced apartments in Ho Chi Min City. It may also look to invest in individual projects with the fund.
The Qatari fund in February bought a 15% stake in an Indian office complex being built at the Bandra Kurla complex in Mumbai by the Chatterjee Group and US firm Starwood Capital. It also owns 49% of one of one of the largest shopping malls in Malaysia, Pavilion Kuala Lumpur. The fund is evaluating buying commercial properties in the US that are financially distressed.
“We anticipate several opportunities in the US for mezzanine financing, and individual distressed assets,” Chamdia said. “We are looking at a number of these opportunities with several partners.”
State-managed funds in countries including Kuwait, Abu Dhabi and South Korea have ballooned to $3.2 trillion in assets.
Fuelled by record oil prices and rising currency reserves, sovereign fund assets may gain four-fold to $12 trillion by 2015, equal to the capitalization of the Standard and Poor’s 500 Index, according to Morgan Stanley estimates.