Barwa Real Estate Company has reported 18% decline in net profit to QR1.17bn in 2012 despite double-digit gains in rental earnings and total expenses falling faster than incomes.
Nevertheless, the company has announced a 10% cash dividend to shareholders.
Total revenues and gains plummeted 47% to QR2.50bn, according to its financial statement filed with the Qatar Exchange. Of the QR2.50bn revenues and gains, domestic operations accounted for more than 97% or QR2.43bn and other GCC countries about 3% or QR81.02mn.
Although rental income rose 19% to QR740.65mn; its income from consultancy and other related services shrank 55% to QR365.17mn, profit on sale of properties by 48% to QR284.79mn, profit on disposal of subsidiaries by 53% to QR189.64mn, net fair value gain on investment properties by 69% to QR433.11mn, share of results of associates by 20% to QR262.40mn and other income by 11% to QR221.21mn.
Total expenses and losses were also trimmed 56% to QR1.31bn.
Operating expenses fell 6% to QR372.08mn, general and administrative costs by 51% to QR465.19mn, net finance costs by 74% to QR201.49mn and net impairment losses by 74% to QR197.65mn.
Total assets were valued at QR50.24bn comprising trading properties worth QR18.40bn, investment properties of QR12.43bn, assets of subsidiaries worth QR5.78bn classified as ‘held-for-sale’, finance lease receivables of QR2.79bn, dues of QR2.72bn from related parties, advances of QR2.67bn for projects and investments and investments of QR2.32bmn in associates.
Total equity stood at QR13.30bn on a capital base of QR3.89bn and earnings-per-share was QR3.01 at the end of December 31, 2012.
SWFs to hit record $5.2tn
Sovereign wealth funds (SWFs) are set to see their assets grow to $5.6tn by the end of 2013, a study found, a sum more than double British GDP and underscoring their status as the world’s wealthiest investors.
Reuters/London
SWFs, state-owned vehicles such as the Qatar Investment Authority which manage windfall revenues for future generations, have become key global market players after the financial crisis, spending an estimated $90bn buying up stakes in Western banks including Barclays for instance.
Benefiting from a decade of high commodity prices and trade surpluses generated by booming trade, their assets have swollen to record highs, growing 8% in 2012 to $5.2tn and set for further growth the study by TheCityUK found.
By comparison, Britain’s GDP was $2.4tn in 2012, according to International Monetary Fund estimates.
“SWFs should see a continuation in the inflow of capital in the coming years as some Asian countries, particularly China, continue to build up foreign exchange reserves, and commodity demand increases with the recovery in the global economy and growth in demand from emerging markets,” TheCityUK said.
TheCityUK, a London-based group tracking the financial services industry, said the assets of SWFs funded by commodity exports — a category including Gulf funds and Norway’s Government Pension Fund — totalled $3tn at the end of 2012, or 58% of the total.
But non-commodity SWFs in countries such as China, funded by the transfer of assets from foreign exchange reserves or budget surpluses and privatisations, are also growing fast.
“Non-commodity funds are capturing an increasing share of SWFs’ assets, a trend that is likely to continue,” TheCityUK said, noting non-commodity SWF assets were twice the level of five years ago.
Asset growth is also coming from new fund launches. Angola, Western Australia and Panama launched wealth funds last year, while Bolivia, Canada and Taiwan are among those planning funds.
Apart from bank investments, SWFs are emerging as buyers of prime real estate in Western capitals, with the China Investment Corp last year snapping up Winchester House, the London headquarters of Deutsche Bank for £245mn.
Another example was Gingko Tree Investment Ltd, a unit of China’s State Administration of Foreign Exchange, which invested more than $1.6bn in office buildings and student housing in London and Manchester.
The Shard tower and the Chelsea Barracks are among the trophy London properties that have received investments from Middle Eastern SWFs in past years, while Norway’s $700bn fund last year said it would raise real estate assets to as much as 5% of its portfolio from 0.3%.
There were some $10bn in real estate transactions last year, TheCityUK said, citing data from the Sovereign Investment Lab at Bocconi University in Milan.
SWFs’ predilection for real estate is driven by low bond yields in some developed countries and stock market volatility, the report said.
The report found however that overall overseas direct investments by SWFs dropped last year.
Their foreign direct investments totaled $57bn in 2012, down more than a third on the previous year, TheCityUK said, citing the SWF Institute’s Sovereign Wealth Fund Transaction Database, which tracks transactions in the industry.
The report noted that since 2008-2009 SWFs have been cutting back on foreign spending to help stabilise domestic financial markets, which were starting to be affected by the economic downturn and falling commodity prices.
“SWFs had also faced public criticism in their countries following a string of losses on their foreign investments at the outset of the credit crisis,” the report added. “The deal transaction sizes have been smaller in recent years as a result.”