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Dubai/Doha: Qatar's real estate developers are struggling even as the country embarks on huge infrastructure building plans - a warning to investors that despite the billions which the Gulf state is throwing around, they won't necessarily profit.
A $7.1 billion (Dh26 billion) state financial support package announced last month for Qatar's largest listed developer, Barwa Real Estate, and the restructuring of other top developers such as United Development Co and state-owned Qatari Diar, highlight the industry's weakness.
Barwa and Diar have cut staff and sold assets to manage their debt. Last October Barwa announced plans to sell more assets in Qatar and Egypt to pay down loans. Qatar is competing with Dubai as a regional financial centre, and it does not lack money; its natural gas reserves make it one of the richest countries in the world per capita.
But the performance of its real estate industry in the last few years raises questions over whether it has the population size and glamour to become a major market for property developers and investors.
The tiny desert state has a population of about two million, only about 250,000 of them local citizens. That is similar to Dubai's size, but Dubai has the rest of the United Arab Emirates as a hinterland, and so far at least, it is winning the competition to establish itself as a base for professionals who work around the Gulf. "There's no incentive for people to stay long in Doha," said Matthew Green, head of research at real estate consultancy CBRE in Dubai.
"Doha clearly needs to build on other components...