Desert boom in Qatar

A sleepy stretch of sand visited mainly by the odd camel caravan over the centuries, Qatar is in the midst of a massive spending spree, financing museums, skyscrapers and rapid modernization - like much of the Gulf region. But unlike Dubai, which wants to dominate in tourism, Qatar has more modest targets for its seemingly endless gas dollars.

By Ron Gluckman/Qatar

APPRECIATING THE VAST, VISIONARY SCOPE Of The Pearl, a 985-acre island boasting golden-sand beaches, yacht-filled marinas, glitzy retail showrooms and Mediterranean-of-the-Middle Eastern style, requires mobility as well as imagination. Someday this ambitious project may achieve its claim as Riviera of the Desert. Right now, though, it’s mostly sand. Or, as I discover while being toured around the site, mud.

  “Everything is changing by the day,” enthuses Roger Dagher, spokesman for United Development Company,  the government-funded firm behind Qatar’s first international real estate venture. “Two weeks ago, this road wasn’t even here,” he notes, as he drives me around one of the world’s biggest manmade islands. Suddenly, due to the rain, it’s gone again. We’re stuck.

  Normally, Qatar gets three days of moisture a year, but while hosting the Asian Games last December, it poured for over a week straight. So, we quickly dash from the car into The Pearl’s swank sales room, where the $2.5 billion project comes into focus.

  A floor model shows luxury villas and apartment towers, embraced by canals, that will house up to 50,000 people. Not one has been built, but the first cluster, Puerto Arabia, is nearly sold out. A bigger frenzy greeted a ring of smaller islands, designed to host one exclusive, lavishly-expensive mansion. All the private isles sold before the sand was poured.

   With the reclamation recently complete, the fervor has only picked up pace. Buyers fly in, salespeople make their pitch. An even bigger buzz is discernable outside, and not confined to The Pearl’s Goliath-size sandbox, where cranes are just lifting the first floors of Puerto Arabia above concrete pads.

  From floor-to-ceiling windows, I look over The Pearl’s newly-minted coastline across azure sea to the existing shore of Qatar’s capital of Doha, itself buzzing. Not only cranes, but helicopters are hoisting girders, busily erecting a flashy new skyline.

  Even before setting foot in this boom town, I had a preview of the madcap activity. Circling by plane, the view was nothing but desert, until seconds before landing, when construction sites and clusters of skyscrapers-in-the making emerged from brown dust.

  But the scene came as no surprise. On the Qatar Airlines flight, business class was filled with briefcase-toting executives. The on-board magazine was equally stuffed: 178 pages, and nearly every other page featuring advertising for a real estate project.

  Qatar is a tiny, thumb-like peninsula, a third the size of Belgium, poking into the Gulf where Saudi Arabia borders the United Arab Emirates. Claiming independence in 1971, Qatar was born into wealth; its thumb pokes into a pot of gold. Qatar floats on a sea of gas. It intends to burn off billions worth to catapult into the 21st Century.

  Over $100 billion has been budgeted for new infrastructure and construction over the next six years. Much will go to develop gas fields, estimated to contain five percent of global reserves, giving Qatar the second-largest fields after only Russia, and some of the world’s highest GDP (which soared 34 percent in 2005 to nearly $50,000).

  Yet, at least half of the investments are budgeted for non-energy projects, according to Minister of Finance Yousef Hussain Kamal. These include highways, sanitation projects, schools and a marvelous array of new museums. But the most visible spending to date  has been on public structures.

  An estimated $2.8 billion was doled out on facilities for the Asian Games alone. Another $5 billion is being spent on a new airport, custom-built to accommodate the coming Airbus A380 and 12 million passengers per year. Another $140 million was spent to expand the existing airport to handle surging traffic as Qatar Airlines continues to buy planes and add routes at a world-leading pace.

  Until a dozen years ago, Qatar was a sequestered Islamic nation. In 1995, Emir Hamad bin Khalifa Al-Thani seized power from his father and began modernizing Qatar, which claims close ties to America, and hosts its largest air force base in the region.

  Businessmen are flooding into the small kingdom, mainly from Gulf nations, which dominate foreign investment. But westerners are also sniffing out opportunity.

  Bechtel Group is involved in the new airport, along with HOK (Hellmuth, Obata + Kassabaum).  Saint Louis-based HOK has also done some urban planning and lent its design skills to five hotel and condo towers in Qatar, according to spokesman Mike Plotnick.

  Real estate is booming, boosted by liberalization of laws opening the market to greater development, and more foreign investment. Rents rose 40 percent in 2005, according to Commercial Bank of Qatar. That prompted government limits on rate hikes, and new property coming on line has cooled things, but the market remains hot. Ingrid Eckert-Prinz, who bought a Pearl flat, says the value has risen 30 percent in 16 months.

  While The Pearl is clearly the gem of this construction boom, everywhere you roam, Qatar seems to have one foot in the sand, another in scaffolding. The local tourist office estimates that 100 buildings are under construction, lending a surreal feel to a desert capital where, until recently, a four-story structure would stand out. There are plans for many mega-projects, including science, education and entertainment cities.

  Much of this new development will be in the Lusail project, north of Doha, near The Pearl, but onshore. Spreading 35 square kilometers, the $5 billion project will add hotels, theme parks, golf courses, more marinas and housing for 200,000 people.

  "The launch of Lusail is a major milestone in Qatar’s development," noted Nasser Hassan Al Ansari, head of the state company Qatari Diar, at Lusail’s launch late last year. He estimated that the site would be ready, and developers building within 24-30 months. Construction will span 10-15 years, added a company spokesperson.

  Qatar’s rapid-fire real estate development would seem earth-shaking, if not for all the parallels in the region. To see Doha’s future, many say, just look 200 miles east to Dubai, which long ago began transforming desert into a world-class destination, with gleaming skyscrapers, water parks and six-star hotels, all funded by its huge oil wealth.

  “There are two questions I get asked all the time,” says Daniela Grendene, marketing director at the Qatar Tourism Authority. “Number one is where is Qatar.” The Asian Games - as much as controversial television network al-Jazeera - have put Qatar on the map, but question number remains: “Is Qatar following in the footsteps of Dubai?”

  The same question is relevant, to some extent, in nearby Bahrain and Oman, which have opted for a Dubai-style build-it-now-and-demand-will-follow approach with their own flash projects, theme parks and plans for dazzling new hotels.

“Maybe it’s difficult to see, because everything is happening, under construction all at once, and it’s all really at the beginning,” Grendene notes. “But there is a plan, a good, well-thought out plan. And it’s definitely not the Dubai plan.”

  Take tourism. Qatar is adding hotels at a boggling rate. Grendene says 40 new hotels are under construction. By 2010, Qatar will claim over 10,000 rooms, more than tripling existing stock. Yet, capacity has been overtaxed for years. During the Asian Games, many visitors were forced to stay in Dubai, flying in daily.

  Although a May 2004 master-plan set out $15 billion worth of investment through the rest of the decade, Grendene says tourism will never become a major industry for Qatar. That is by design. Dubai is frantically spending its oil money to finance new industries before the oil runs out in a few decades. But Qatar’s gas can light Europe for centuries.

  As a result, Qatar doesn’t face the same challenges of its oil-dependent neighbors. In fact, rather than compete with the other Emirates, Qatar can play a complimentary role and reap the benefits as the region develops. Shipping gas is a costly, inefficient process. All the better if Qatar can count on modern, energy-hungry customers close to home.

  Qatar doesn’t yearn to become another Las Vegas of the Gulf. Instead, it looks to high-end, low-impact tourism. “Our target is 1.4 million visitors by 2010,” says Grendene. “That’s a very humble goal compared to Dubai and Abu Dhabi. Qatar doesn’t want to be a mass-market destination.”

  Still,  that would be almost double the 730,000 visitors who came in 2005, a more than 20 percent rise over tourism in 2004.

  Assuaging the future shape of Qatar is difficult, since practically everything is still theoretical at this stage. The Pearl, while clearly benefiting from the publicity and early speculation, remains little more than an offshore construction site. Lusail officials were unable to provide detailed plans for development or partners.

  Yet, one can look around this small kingdom and sense a certain aesthetic that bodes well for all the spirited spending. Sitting at the end of a long causeway, rolling into the sea from Qatar’s chic Corniche district is a dazzlingly beautiful structure that will surely rank with some of I. M. Pei’s finest creations. The New York architect, who turns 90 this year, was lured out of semi-retirement to create the region’s top Islamic museum.

  Pei took the commission in 2000, then traveled extensively to study Muslim and Mogul architecture. You cannot miss the nifty ziggurat profile and classic Islamic references in open space and shadows, not to mention the oasis-style ring of palm trees. But it’s also a smart, modernist building that seems to float on the sea. It opens in November.

   Within a few years, Pei’s Museum of Islamic Arts will stand along showpieces from other powerhouse architects. France’s Jean Nouvel has designed the Qatar National Museum, while Arata Isozaki is working on a National Library. The state photography collection is to be housed in another new museum designed by Santiago Calatrava.

  Such structures will not only help to reshape Qatar, but the visitor’s perception of the place. Already, the sellout crowds at the Asian Games had a taste of what is to come in Aspire Tower. Rising 318 meters, this iconic tower wrapped in wire mesh is the tallest building in Qatar, but not for long. Soon, the distinction will pass to the Barwa and Dubai towers. All but one of Qatar’s 20 tallest buildings have gone up since 2000.

  Still, Aspire stands out, and not just in this desert kingdom. Entirely wrapped in metal wire that provides a bird-nest appearance, the smokestack-shaped tower is the tallest in the world to receive the treatment, according to Haver & Boecker, the German company that did the work. 

  The wires were fitted with LED lights to create dazzling light shows during the games. It will become a hotel and upscale mall.

  Such designs, along with the museums and marinas, will be instrumental in attracting the kind of international audience that Qatar craves. Perhaps most crucial are changes in the law, allowing foreigners to invest in local markets and property. One of the key appeals of The Pearl is that purchase includes the right of residency, an invaluable asset for all the foreign companies hoping to cash in on the Qatar gas boom.

  “What attracts me to Qatar is the solid investment,” notes Matthias-Prinz, of Frankfort. “In Dubai, it’s like Alice in Wonderland. Qatar’s plans are well thought out and I like the government involvement. That brings stability.” 

  She and her husband are planning to buy a second apartment at The Pearl. “We expect fantastic returns.”

  At the nearby Ritz-Carlton Hotel, General Manager Thorsten Ries cannot help but marvel at all the construction. “This area around here is becoming like Beverly Hills,” he chuckles. “When I arrived, five years ago, it was all desert. From the 23rd floor, you didn’t see one light. Now, it’s like we are downtown.”

  “Qatar is on the move,” he says proudly. And, with its planning and pacing, there seems little danger that the modernization will get stuck in the mud.

Ron Gluckman is an American reporter based in Bangkok, who visited Qatar in December 2006, during the Asian Games. This story was for Urban Land Institute, which ran it in April 2007. 

All pictures by RON GLUCKMAN

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