Has Brexit dimmed the UK’s investment appeal? Not for Qatar. HE the Prime Minister and Minister of Interior Sheikh Abdullah bin Nasser bin Khalifa al-Thani said on Monday Qatar plans to boost its investments in the UK by £5bn ($6.3bn) within the next five years. With an optimistic view about the future of the British economy, Brexit uncertainties, for sure, appear to have little bearing on Qatar’s investment plans.
One of the largest foreign investors in the UK, Qatar has already spent an estimated £35bn to £40bn on UK assets, owning high-profile stakes that includes the Harrods department store, the Shard skyscraper, Canary Wharf and the Milford Haven liquefied natural gas terminal in South Wales.
Qatar is now weighing opportunities in areas including infrastructure, real estate and technology, HE the Finance Minister Ali Sherif al-Emadi told Bloomberg at the Qatar-UK investment forum in London. The plan will be carried out through the Qatar Investment Authority, he said.
Qatar’s long-term investment plans should envisage a win-win situation for both countries just as UK Prime Minister Theresa May plans to start the two-year clock on Brexit negotiations with the European Union today. Ahead of the break, Britain is taking steps to maintain foreign investments as well as retain talent and capital.
Stakes are high for Qatar also to keep the UK economy and asset prices strong during and after Brexit. The world’s biggest LNG producer, Qatar accounts for 90% of the UK’s LNG imports. Qatar invested billions in the UK during the global financial crisis, building up a rock-solid stock and real estate portfolio over the past decade.
Qatar’s investments in the UK as well as Europe are mainly keeping line with the futuristic strategy of economic diversification. In an era of lower oil prices, officials are seeking more investment flows as Qatar diversifies its economy away from oil and gas and continues a $200bn infrastructure upgrade before the 2022 World Cup.
QIA chief executive officer HE Sheikh Abdullah bin Mohamed bin Saud al-Thani said the $335bn sovereign wealth fund has “committed a big amount of investment in the UK.”
It’s been close to nine months since the British voters narrowly rejected the view of prime ministers, presidents, finance ministers, business leaders and economists that exiting the EU would hurt the UK. But all the doom and gloom predicted to follow the “Yes” vote has not just happened. And London has retained the mantle as the world’s top financial centre.
Sure, while the post-referendum plunge in the pound may look UK assets cheaper for Gulf buyers, the nosedive could also bring down valuations of the Gulf investments in the UK. But longer term, the UK (which is expected to grow by 2% this year, up from the UK budget watchdog’s previous forecast of 1.4%) will remain an attractive place for investment, according to Qatar’s top decision makers.
The still raging Brexit debate is bringing about extremely conflicting views. But driven purely by commercial interests, Qatar has put it simple and straightforward: “The UK has the right recipe to contribute to Qatar’s economic diversification,” says HE the Minister of Energy and Industry, Dr Mohamed bin Saleh al-Sada.
