Friday, 25 June 2010
U.K. developer CPC Group Ltd. won a trial in which it sought 81 million pounds ($120.5 million) from the real-estate investment arm of Qatar’s sovereign-wealth fund over a botched deal to build luxury apartments in London.
Qatari Diar Real Estate Investment Co. must pay CPC, controlled by real-estate entrepreneur Christian Candy, for breaching an agreement to develop the landmark Chelsea Barracks site, Judge Geoffrey Vos ruled today in London. The court will award damages or costs at a later hearing, he said.
Vos backed CPC’s claim that the site plan application was wrongfully withdrawn in June 2009 because the emir of Qatar, Sheikh Hamad Bin Khalifa Al-Thani, wanted to avoid upsetting Prince Charles, who complained about the site’s modern design. The judge disagreed that Qatari Diar acted in bad faith.
Bahrain needs to reinvent itself as a financial center if it wants to return to growth and remain a destination for the region's oil wealth after the financial crisis clipped the wings of its investment houses.
Analysts say the only opportunity for Bahrain lies in funding the large infrastructure projects planned in the Gulf region, but building up expertise will be a long, hard grind with uncertain outcome.
Bahrain shelled out new banking licenses in particular to Islamic investment houses during a five-year regional oil and property boom that ended in 2008, with banks living on upfront fees on money raised for property and private equity projects.
The Middle East has tripled its share of investment in UK commercial property in the past five years, with the oil-rich Gulf seeking to take advantage of sharp falls in British real estate prices.
Last year, investors from the Arab world spent £1.48bn ($2.2bn, €1.79bn) on UK commercial property – 16 per cent of all foreign investment in the sector, compared with 5 per cent in 2004, according to Trowers & Hamlins, an international law firm. The firm, which has offices in Britain and the Middle East, said the region’s investors had increased their exposure to take advantage of the fall in property prices, with the UK looking particularly attractive because of sterling’s devaluation against the US dollar.
With the exception of Kuwait, all Arab Gulf states peg their currencies to the dollar. The region’s wealthier governments were also able to build up significant financial reserves during the 2003-08 oil boom, making them cash-rich during the UK property downturn.
Ahmed al-Tayer, a former finance minister, became governor at the Dubai International Financial Centre last year. The close adviser to Dubai’s ruler is tasked with maintaining the centre as the region’s financial services hub. Mr Tayer also plays a major role in dealing with the emirate’s usd100bn debt mountain. He was interviewed in Dubai on June 22.
Financial Times: The DIFC has been going through a process of review and restructuring following the global financial crisis. Are you planning a change of focus?
Ahmed al-Tayer: The DIFC is five years-old and as a centre in the Middle East, between Singapore and Hong Kong, and international centres like London or Frankfurt – this is a region rich in financial resources and in the past these resources were being invested abroad. There was a need to have a centre in order to create an environment, an ideal environment, of low taxes, to attract international companies, financial companies, and to attract companies that serve them, like law firms, accounting firms, Islamic businesses and asset management firms.
Dubai’s financial centre is to refocus on its core business of attracting financial institutions as the indebted emirate seeks to shrug off past excesses, according to its governor.
Ahmad al-Tayer, a former finance minister who has gained influence as Dubai seeks to revive its economy, said the tax-free Dubai International Financial Centre was to restructure to boost competitiveness.
This process, moulded by a report from McKinsey, the consultants, has included dozens of redundancies as the DIFC tries to keep costs down. But it will be complemented by attempts to attract financial institutions by pledges of a more competitive leasing structure.