QATAR’S wealth fund has spent nearly 1bn pounds to buy into British airport owner BAA, stepping up a shopping spree that has seen it hoover up a raft of household names.
Qatar Holdings paid 900m pounds for 20% of BAA, which runs Heathrow, Stansted, Glasgow, Aberdeen and Southampton airports. The deal extends Qatar’s drive to invest in Britain, where the tiny Middle Eastern nation – smaller than Belgium – is estimated to have spent some Pounds 10bn of oil money already. UK assets include Harrods and 26% of supermarket giant Sainsbury’s worth around Pounds 1.6bn. Qatar also owns Europe’s tallest skyscraper The Shard, from which members of its royal family can gaze upon the rest of their property portfolio. This includes vast swathes of Canary Wharf and the Olympic Village, to which it will get the keys once the Paralympic Games are finished. No 1 Hyde Park, the world’s most expensive block of flats, completes a glittering array of property investments.
Qatar can also lay claim to 20% of two London markets at opposite ends of the scale. It owns a fifth of the moneyed London Stock Exchange at the heart of the Square Mile and the same stake in Camden Market, home of ageing punks and European tourists seeking bargain clothes.
Barclays, in which Qatar owns a stake worth Pounds 1.4bn, advised it on buying part of BAA from Spanish construction firm Ferrovial, Singapore’s investment fund GIC and Britannia Airport Partners. The 900m pounds deal will strengthen its foothold in Britain as Qatar, which will also stage football’s World Cup in 2022, looks to spread its influence around the world. And it has identified Britain as a favoured destination to invest its oil billions, despite the flagging economy. Qatar Holdings said that the UK ‘remains an attractive investment destination and there is long-term fundamental strength in the British economy’.
The wealth fund built its stake by buying nearly 11% from Spanish construction firm Ferrovial, 5.6% from Britannia Airport Partners and 3.75% from Singapore’s wealth fund GIC. A consortium led by Ferrovial bought BAA in June 2006 but has struggled to make a profit due to the crippling debt pile it racked up to finance the deal.
BAA has also been ordered to sell Stansted by the Competition Commission, which ruled that it had too tight a grip on British airports.