Industries Qatar sells real estate stake
Doha, December 29, 2011
Industries Qatar (IQ) sold its stake in a local real estate firm for $44 million, the Gulf region's second-largest chemical producer by market value said on Thursday, as the property sector faces low demand and growing supply.
IQ had held a 34-percent stake in Fereej Real Estate Company, which was set up in 2008 in a joint venture with a Gulf International Services unit and Qatar Real Estate Co (Alaqaria). The latter had 33-percent stakes each.
'In view of the development in the real estate segment, the company has decided to proceed with the liquidation,' IQ said in a filing to the Qatar stock exchange.
Gulf International's Al-Koot Insurance and Reinsurance unit said in a separate filing on Thursday that it too had liquidated its position in Fereej.
Shares of IQ and Gulf International were down 0.8 percent and 0.43 percent respectively on the Qatar bourse.
The announcement comes a day after Union Development Company (UDC), the developer behind Qatar's man-made Pearl island project, said it is in talks to issue 80 million new shares to a state pension fund, sending its stock tumbling 8.1 percent on Thursday.
Qatar, the world's largest exporter of liquefied natural gas (LNG), is facing an oversupply of commercial and residential property with more units expected to enter the market soon.
'It's the same pattern that we have seen in Dubai, where there was a huge supply-demand gap and eventually prices started falling,' said Mostafa El-Maghraby, senior financial analyst at Kuwait-based Global Investment House.
'Qatar is now seeing signs of stabilisation. But some companies have got into so much that they can't get out of it.'
The analyst said oversupply in Qatar is not as exaggerated as that seen in Dubai, which suffered a crippling property bust, nor at levels currently being witnessed in Abu Dhabi.
In July, Qatar sovereign fund's property investment arm, Qatari Diar, was reported to have cut 30 staff members and was looking to overhaul its strategic goals. - Reuters