Qatar pledged £5 billion of investment in Britain in a show of support for the world’s fifth-largest economy just days before Prime Minister Theresa May triggers formal Brexit talks.
The wealthy Gulf state has £40 billion of investments in the United Kingdom, including high-profile London landmarks like the Shard skyscraper, Harrods department store, The Savoy hotel and a stake in the Canary Wharf financial district.
While the June 23 referendum vote to leave the European Union took many investors and chief executives by surprise, Qatar’s top financial players used an investment conference in London to pledge support for Brexit Britain.
The head of the $335 billion Qatar Investment Authority (QIA) sovereign wealth fund said he saw opportunities in Britain, adding that the fund was focused on infrastructure, healthcare and technology.
“I am still looking, even after Brexit there will be opportunities QIA can really hunt for,” QIA chief executive Sheikh Abdullah bin Mohammed bin Saud al-Thani told the conference. “Whenever the (British) government would like the QIA to step in we are ready.”
Qatar’s prime minister, Sheikh Abdullah bin Nasser bin Khalifa al-Thani, said in a statement that Qatar expected to invest £5 billion in Britain over the next five years.
June’s shock Brexit vote triggered the deepest political crisis in Britain since World War Two and the biggest ever one-day fall in sterling against the dollar, though the economy has continued to grow.
But Britain’s exit from the EU – probably in 2019 – has raised a number of questions about future economic growth and whether London can retain its position as the only financial centre to challenge New York.
Today PM Theresa May is due to notify the EU of Britain’s intention to leave the club it joined in 1973.
Qatar, which delivers 90 per cent of Britain’s imports of liquefied natural gas and is the world’s biggest producer of the fuel, could play an important role in steeling the UK economy’s against economic fallout during and after Brexit.
“The UK will have a new era post-Brexit ... The negotiations will start among Europeans and nobody is extremely clear about where the negotiations will lead to, however we can sense the possibility of the UK’s manufacturing power going higher and with that the need for energy,” Qatar’s Energy Minister Mohammed bin Saleh al-Sada told Reuters in an interview on Monday.
“The UK’s manufacturing and industrial sector thriving is possible, and for that Qatar will always be there to supply the energy required. Certainly we can contribute to the UK’s need,” said Sada.
Sada said Qatar supported a free-trade agreement which the six-nation Gulf Cooperation Council, including Qatar and the two biggest Arab economies, Saudi Arabia and the United Arab Emirates are hoping to secure ahead of Brexit to ensure preferential arrangements with Britain.
“Qatar is supporting that. That would be excellent. Qatar will do its best to further this agreement,” he said.
Sovereign and private investors from Qatar, Saudi Arabia, Kuwait and the United Arab Emirates have been prolific buyers of British assets in the past decade, snapping up billions of dollars worth of property, mostly in London.
Qatar has also sought to diversify its UK investments beyond real estate, including buying stakes in retailer J Sainsbury Plc and London Heathrow airport.
But Gulf states including Qatar are facing pressures of their own as they try to diversify their economies and boost non-oil trade after more than two years of low global oil prices that have hurt their finances.