Doha redevelopment on track

Doha: Redeveloping a property can be an onerous task, as any architect or project engineer will tell you. So when an entire city block — all 31 hectares of it — is being made over, the scale of difficulty becomes multiplied many times over. And to make it a bit harder, the project has been set some exacting sustainable development measures.

But two years into its launch, the $5.5 billion (Dh20.20 billion) Msheireb Downtown development — arguably the costliest non-energy related ongoing project in the region — in the heart of Doha is 20 per cent complete and set to reach some key milestones this year.

Work on two of the four phases is going on simultaneously as the master developer believes this will translate into a better use of resources and also help create a uniform look and feel to the final result by 2017.

That is indeed the key. The stated intention — and one that Msheireb Properties and its contractors are faithfully looking to adhere to — is not to create a swanky 21st century downtown.

The original character of one of Doha's oldest neighbourhoods will be maintained through low- and mid-rise structures, cobbled streets, the Qatar National Archive, and heritage sites maintained for posterity. There will be higher structures, but clubbed together and not going higher than 20 storeys.

Large scale

"It will maintain the roots to our past; at the same time it will represent a departure from the prevailing emphasis on creating the tallest or the oddest looking structures," Eisa Al Mohannadi, CEO of Msheireb Properties, a subsidiary of the Qatar Foundation, said. "Rejuvenation projects of this scale have never been attempted in the region before."

Just over 30 months ago the project site was a bustling neighbourhood that has been in existence for about 60 years. The Qatar Foundation acquired the 31 hectares and the original tenants were compensated and relocated. The existing infrastructure was completely demolished to make way for the new.

Mixed use format

The first tenants, comprising key government departments, are to move in before year-end.

Offices for the private sector and an extensive residential component also figure in the masterplan. Retail will also be a prominent part of it through a mix of street-side locations and within a bigger department store format. There are to be four hotels, with Mandarin named as operator of the first.

As of now, only long-term leases are available on all types of properties, which would thus create a sustainable income flow for the master developer. "We are a commercially driven organisation, but the project's objectives go far beyond making money," Al Mohannadi said. "If that was the case, we would not have spent three years on researching what kind of architectural language would have a link to the past.

"As a full-fledged developer, we are taking it from start to end, even extending to the operational side of things. While leasing is our immediate objective, there might be a point when we could sell either the plots or properties."

Due diligence

For contractors to come on board, the developer has mandated creation of joint ventures with Qatari entities.

They will also have to go through an exhaustive due diligence process to ensure project deadlines are maintained, and which has proved the bane of large master developments elsewhere in the region.

All of which will keep the company busy for the next five years. Thereafter, "we could consider taking up other developments either within Qatar or, if required, look outside as well," the CEO added.

"Rejuvenation projects are what the company is skilled in and we could replicate it elsewhere."

Structured funding

As a wholly-owned subsidiary of Qatar Foundation, cash is not an immediate issue for Msheireb Properties. But come 2013, the master-developer will be weighing a few options.

It could include calling in additional shareholders' equity or tapping external funds from institutions.

"We are gearing towards that kind of milestone," Eisa Al Mohannadi, CEO, said. "This has been the plan from the start.

"The project itself is moving fast and we have the funds in place to meet all short-term needs, which would cover phases 1A and 1B. The design for all the phases will be ready this year itself. We are ready for any scenario to continue with the development.

"Being a phased development, the funding needs will be structured in a similar manner."

But what is being ruled out is a stock market floatation.