By Sally Peck

While other projects in the City have been mothballed, construction on the 310-metre skyscraper, which shoots up from Victorian railway arches in Southwark, has charged through the economic slump. It will offer 27 floors of offices (as yet, unleased), 10 luxury flats (as yet, unsold), and a 200-room five-star hotel and spa. The recession-defying Shard owes its existence to the Qatari royal family. In 2008, when the original British backers ran out of cash, the Qatar Investment Authority, the government's sovereign wealth fund, pumped millions of pounds into the Shard, securing an 80 per cent interest, then valued at 2 billion pounds.

"It's difficult to get speculative development finance for any buildings - that's been the case post-Lehmans," said Damian Corbett, of estate agents Jones Lang La-Salle. "The Qataris have been very good to the market."

The Qatari royal family does not have a monopoly on iconic London buildings: Gulf neighbour Prince Alwaleed bin Talal of Saudi Arabia counts the Savoy among his investments. The Dorchester is owned by Brunei Investment Agency.

Bush House, home to the BBC World Service, has been owned since 1989 by a Japanese property company, a reminder of the time when Japan, before its long slump, was buying up assets around the world.

But while other sovereign funds have parked their money in more anonymous commercial buildings, Qatar has been drawn to the most high-profile properties.

The Shard joins Harrods, the Canary Wharf tower, One Hyde Park, and the US embassy building in Grosvenor Square in furthering what Qatari Diar, the property investment arm of the emirate's sovereign wealth fund, refers to on its website as its "sphere of influence in London." Among the group's current projects are the Shell Centre, behind the London Eye, and the "East Village," a residential development in London's Olympics headquarters. The prominence of the projects is not just physical: the family's ownership of Chelsea Barracks has allowed it access to the British establishment, putting Qatari Diar's chairman, Sheikh Hamad bin Jassim bin Jabor Al-Thani, in the position of being able to grant the Prince of Wales a favour, and ease his "sinking heart" by reconsidering controversial 3 billion pound plans to develop the site. The decision led to an 81 million pound legal dispute between Qatari Diar and its co-developer, Christian Candy.

Experts have suggested that the desired returns on Qatar's investments are not solely financial. Dr Kristian Ulrichsen, a Research Fellow at the LSE, said that by investing in London property, the emirate was seeking to re-brand itself and diversifying its security through soft diplomacy.

Qatar was a British protectorate until 1971. Most members of its royal family spent parts of their youth in London, or went to Sandhurst. They are therefore familiar with Britain's top brands - and want to buy association with them. "This high-profile, iconic acquisition of global brands fits into their strategy to get everyone to talk about Qatar," said Dr Ulrichsen.

"But it's also a diversification of security. They realise that the more embedded they become in people's consciousness, the harder it will be for people not to come to their aid if anything happens in the Gulf."


80 per cent-owned by entities backed by the Qatari sovereign wealth fund, 20 per cent-owned by London-based developer Sellar Property Group

310 metres

Cost: valued at 2 billion pounds in 2008

Canary Wharf Tower (One Canada Square)

Owned by Canary Wharf Group Plc, which is majority owned by Songbird Estates, whose investors include Qatari, Chinese and other interests

235 metres

Cost: 500 million pounds to build in 1991

Heron Tower (110 Bishopsgate)

Owned by Heron International, a UK-based property development company

202 metres (230 metres including mast)

Cost: 500 million pounds

Tower 42 (formerly NatWest tower)

Owned by Nathan Kirsh, South African businessman

183 metres

Cost: bought in December, 2011, for 282.5 million pounds

Gherkin (30 St Mary Axe)

Owned by IVG Immobilien AG, German real estate company, and Evans Randall, the Mayfair investment firm

180 metres

Cost: sold for 630 million pounds in 2007

O2/Millenium dome

Owned by Anschutz Entertainment Group, USA

50 metres (to top of dome)

Cost: part of a 600 million pound development

London Eye

Owned by Merlin Entertainments Group Ltd, British operator of amusement parks

135 metres

Cost: 70 million pounds to build in 1999

50 metres (to top of dome)

Cost: part of a 600 million pound development

Battersea Power Station

Controlled by creditors of Real Estate Opportunities, a vehicle of Irish property magnates John Ronan and Richard Barrett who bought it in 2006 but could not develop it

103 metres

Cost: 400 million pounds in 2006.


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