Qatar is a small peninsula state whose territorial waters contain the world’s largest gasfield, pushing its GDP to around $19.4bn – even higher than long-time world champion Abu Dhabi. But under Emir Sheikh Hamad Bin Khalifa Al-Thani, this has not proved enough.

The creation of a new Qatar Financial Centre, glittering new real estate developments and the construction of world-class sporting infrastructure that will host the 2006 Asian Games have turned Doha into a construction site. Now foreigners are gradually being allowed in on the act, with the Dubai model of offshore-reclaimed land residential developments the order of the day.


In June 2004, Qatar revised its laws on property ownership. The amended law (No 17 of 2004, Article 3) says: “A non-Qatari may own real estate in the Pearl of the Gulf Island, the West Bay Lagoon, and Al-Khor Resort Project, in accordance with the terms and conditions issued by a Cabinet’s resolution.”

Limits apply

One year on, the opportunities for foreign investors remain limited to buying into luxury developments on reclamation projects. As yet there is little chance to own retail or commercial real estate. Even so, this reflects considerable progress – expatriate buyers are being offered 70% cheap finance for some schemes, and have the added incentive of a residence permit when they buy into chosen developments.

In Gulf terms, this represents a tectonic shift. However, the possession of real estate remains restricted to various designated areas and subject to government controls.

Land ownership is concentrated in the hands of sheikhs from the ruling Al-Thani family and leading merchant families. Many of the multi-million dollar shopping malls and other big recent developments are connected to, or backed by, members of the ruling family. Thus the $400m City Center shopping mall is owned by the huge Faisal Bin Qassim Al-Thani and Sons Holding Company. Doha sources say the new Hyatt Plaza mall is backed by former interior minister Sheikh Khalid Bin Hamad Al-Thani and The Mall development is owned by a sister of Emir Sheikh Hamad.

Parts of central Doha remain the possession of senior Al-Thanis – the Ramada Hotel, the Center building and the Ghanim Garden compound belong to Sheikh Ghanim Bin Ali Al-Thani – the brother and son of former emirs.

The main opportunity for foreign investors comes with The Pearl-Qatar, a $2.5bn, 4 million square metre reclaimed-land development, which has been proudly claimed by Qataris as the ultimate in opulent living – the ‘Riviera Arabia’. Sales started last December and most apartments and villas were reserved within days of being released for sale.

There is plenty of pent-up demand in a market where, until now, expatriates and many of Qatar’s small population have had to rent.

Pearl developer United Development Company (UDC) says most of its buyers are end-users; 60% of the phase one inventory was taken up by Qatari investors and the rest by foreign buyers. Development director Nick Bashkiroff says buyers have a mixed profile, from individual investors in Qatar and the Gulf Co-operation Council states, to institutional buyers from the Indian sub-continent, Europe and the wider Middle East.

The sale of new tower blocks on the island has gone well, too. Dubai-based developer Sabban Property Investments announced in May that it will build three residential towers on Porto Arabia, The Pearl-Qatar’s main marina. Soon after, Qatar Insurance Company announced it would build a 150-apartment residential tower there.

Freehold appeal

Part of The Pearl-Qatar’s appeal is its freehold status. UDC director Oman Al-Fardan describes the properties as “the first within the Gulf to be offered with true freehold status”. Mr Bashkiroff has pointed out that freehold ownership “is a matter of law that has been passed by His Highness the Emir. Fundamentally, it allows you to own property and to transfer it to third parties as you wish. You can also pass it on to your heirs, who inherit automatically, and that is unique to The Pearl-Qatar.”

With residents complaining of spiralling rents in Doha, and increasing difficulty in finding suitable properties to rent, locals and expatriates may see offshore property as the way forward. However, potential expatriate investors voice concerns over The Pearl-Qatar’s terms of resale, which stipulate that UDC has to be given first option on buying back the property.

Mr Bashkiroff confirms that is the case. UDC can buy back the property but it has to tell the owner of its intention within seven days and pay “market rates”. If UDC does not exercise its option, the vendor is free to proceed as they want. The reason, Mr Bashkiroff says, “is based on what’s happened elsewhere, where you get block purchases and people that are manipulating the market. It really ensures that property is not dumped at pricing below or more than it should be”.

Property market watchers are aware that many developments elsewhere in the GCC region have been subject to intense speculation. UDC managing director Khalil Al-Sholy says: “We have received offers to buy whole towers, precincts and in fact the whole [Pearl-Qatar] island, an approach which we have actively discouraged.”

Loans available

Qatari banks are making loans available to foreigners and locals to construct property on areas of land such as the West Bay Lagoon. A study by Qatar Central Bank (QCB) showed that in Q1 2005 local banks continued to increase their loans for land purchases – extending credit worth Qr4.1bn ($1.1bn) in Q1 2005 as against Qr3.5bn in Q1 2004. In 2000, such loans amounted to only Qr487m.

This is an emerging consuming market. Personal loan amounts have also increased, according to QCB data, to Qr16.6bn in Q1 2005, compared with Qr10.9bn in Q1 2004. One banker says: “I have come across several expatriates who have gone in for personal loans to finance their land and housing needs rather than lifting sector-specific credits. This may be because of easy availability of personal loans.”

The terms of loans for foreigners and locals seem extraordinarily favourable. Among recent offers, the biggest local commercial institution, Qatar National Bank (QNB), has announced a memorandum of understanding with Dar Investment and Development, the owner and developer of the Lagoon Plaza project. Construction has recently started on this freehold twin towers scheme – another development in which buyers will be given Qatari residence permits.

QNB says it will provide Qatari nationals with up to 75% of the cost of the property, while expatriate buyers will be eligible for up to 70% finance. No guarantors would be required; there is a two-year grace period on repayments and a repayment period of up to 25 years.