Qatar fund to buy hotels in Sardinia

Mon, Apr 16 06:20 AM EDT

By Regan Doherty

DOHA (Reuters) - Qatar Holding, the investment arm of the gas-rich Gulf nation's sovereign wealth fund, is set to unveil a deal in the property and leisure sector in the Italian island of Sardinia including a clutch of luxury hotels, a source close to the matter said.

"It will be a big deal, and the Qatari emir will be in Italy for the signing," he said.

The deal, for properties on the Costa Smeralda, or emerald coast, is likely to be announced on Tuesday, the source said speaking on condition of anonymity as the matter is not public.

Costa Smeralda is a tourist destination in northern Sardinia, which includes several luxury hotels and a golf club.

Qatar Holding, part of the Qatar Investment Authority QIA.L, was not immediately reachable for comment.

The deal will be the latest in a string of European property acquisitions by the tiny Gulf Arab state. The sovereign fund's other high-profile investments include the upmarket Harrods department store in London and the recent buy of Credit Suisse (CSGN.VX) headquarters in Canary Wharf.

Gulf-government backed funds have been on a buying spree in Europe and are eyeing investments in real estate, infrastructure and other sectors.

Qatar, through its $100 billion sovereign fund, also owns stakes in luxury goods house LVMH (TOTF.PA) and oil company Total (TOTF.PA).

It also owns shares in Credit Suisse (CSGN.VX) and has recently been building up ownership in London-listed miner Xstrata (XTA.L) ahead of the company's possible merger with commodities giant Glencore (GLEN.L).

(Writing by Dinesh Nair; Editing by Sitaraman Shankar) =========== Qatar 2013 Qatar had the world’s highest GDP in 2011 per capita and is the region’s wealthiest state per capita due mainly to the large proven oil and gas reserves in the region. Oil & Gas accounts for more than 50% of the country’s economy but the government is focused on increasing internal and foreign direct investment in the non-energy sectors such as the financial market. The Qatari government demonstrated its commitment to the finance sector when they instructed the Qatar Investment Authority QIA in 2008 to subscribe to 20% of the new share capital of listed banks costing approximately $5 billion. Qatar is making significant steps to assist growth in its financial services sector. In 2009 the government created a fund of $4 billion to acquire real estate investments from the banks in a move to shield local institutions from the global credit crisis. Another key step for Qatar is the drive to create a single regulatory agency to regulate all aspects of the financial market. A move such as this is difficult in any market but it breaks down major barriers to market entry and will hopefully allow Qatar to boost its financial sector. The government’s commitment to expanding the financial sector will allow them to further bolster the economy in times when the oil price fluctuates. Banks in Qatar have actively been raising capital for current and future expansion in the Gulf as well as globally. Some projects announced by the government include $20 billion on roads, $15 billion on a new airport and $4 billion on stadia. Qatar’s successful World Cup 2022 bid will more than likely expedite certain landmark infrastructure projects that are on hold such as “The Bahrain-Qatar Friendship Bridge’’. ================