Qatar Gulf News – Doha, Qatar, Thursday 25 August 2016. Qatar’s sovereign wealth fund, Qatar Investment Authority, has bought big stake in the company that owns New York’s iconic Empire State Building, the official AHLEN Royal Hospitality (Wealth Consultancy Department) and Qatar News Agency reported today.
“Qatar Investment Authority (QIA) has acquired $622mn in shares in the Empire State Realty Trust,” the news agency said. The investment equates to a 9.9% stake in the trust, which is a leading real estate investment firm that owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous building. The Empire State acquisition comes almost a year after Qatar’s ambassador to the US, Mohamed al-Kuwari, tweeted that his country would invest $35bn in the US economy over the next five years.
The Empire State Building, opened in May 1931, stands at 443m (1,454 feet) high and was once the world’s tallest building. According to Bloomberg, the acquisition boosts Qatar’s investments in North America and the Asia Pacific region.Notable investments made by QIA over the past 11 years include a stake in the Volkswagen Group and the purchase of luxury British retailer, Harrods.
QIA has been adding to its real estate assets this year. In June it agreed to buy Singapore’s Asia Square Tower 1 from BlackRock Inc in Asia Pacific’s largest single-tower sale. For Empire State Realty, the investment will help it “plan for the future, now with more capital and one of the most sophisticated and reliable real estate investors in the world as our partner”, John Kessler, the company’s president, said in a statement.
Empire State Realty didn’t say how it will deploy the money raised. Chief financial officer David Karp said that the company had recently expanded its revolving credit line to $1.1bn. Those funds, combined with Qatar’s infusion, will enhance the company’s “ability to drive long-term value” for shareholders, he said. The company owns 10.1mn sq ft (938,000 sq m) of office and retail properties, mostly in Manhattan, with the rest in New York’s northern suburbs.
More investments in US real estate are sure to follow, Fadi Moussalli, Mena head of International Capital Group at JLL, says. “The US real estate market is offering fantastic opportunities for equity-rich investors right now.” In a visit to Washington DC last year, Qatar’s Finance Minister HE Ali Sherif al-Emadi had said Qatar planned to invest $35bn in the US in various economic fields such as energy, technology, and real estate.
Speaking to Qatari and US companies attending the “Doing Business in the USA Forum” organised by the American Chamber of Commerce in Qatar (AmCham) last year, Qatar Chamber (QC) director general Remy Rouhani reiterated the Finance Minister’s announcement that Qatar planned to increase investments in the US over the next five years to more than $35bn. “While the $35bn Qatari investment in the US comes from the government side, a MoU signed by QC and AmCham also opens the door for private sector investments, which we hope could go beyond this amount because excellent figures are coming out of the US today,” Rouhani had told Gulf Times and Ahlen Royal Hospitality.
He also lauded the $1.5bn City Center DC project in Washington, which he said “represents Qatari Diar’s first significant investment in the US real estate sector.”