Saturday, November 7, 2009

Historic U.S. Property in London Sold For $650 Million

The U.S. Embassy in London announced this week that:

The U.S. State Department has entered into an agreement to sell the Chancery in London, located in Grosvenor Square. The sale is to Qatari Diar Real Estate Investment Company headquartered in Doha, Qatar. The agreement was signed for the United States by the U.S. Ambassador to the United Kingdom, Louis B. Susman.

With the signing of this contract the United States takes another step towards relocating to a new state-of-the-art embassy which will enhance the urban fabric of London and demonstrate exceptional American architecture. The construction of the new U.S. Embassy in the Nine Elms area of Wandsworth will provide a modern, open and secure American diplomatic facility in London.

In early 2010, the State Department will announce a winner of the design competition for the new U.S. Embassy in London. Actual groundbreaking will depend on many factors, but it is hoped that construction will begin in 2012 or 2013 with the project completed by 2016 or 2017.

The United States will continue to occupy the chancery in Grosvenor Square until the relocation is complete.

The press release doesn't indicate what price we got for the chancery, but the London Evening Standard reported that real estate experts estimated the sale price at about $650 million.

This property sale is quite a milestone for the Bureau of Overseas Buildings Operations (OBO) and its new construction program. Up until a year or so ago, no one I know believed that we would ever actually replace our historically and culturally significant properties in London, Paris, or Rome with new embassy buildings. I still can't imagine replacing Paris or Rome (or New Delhi, either), no matter what the Capital Security Construction Program may say. Maybe the London sale portends a move someday out of the Place de la Concorde and the Palazzo Margherita, but I'll believe it when I see it.

Regarding the buyer of our embassy property, the Qatari Diar Real Estate Investment Company is wholly owned by the Qatar Investment Authority, which is a sovereign wealth fund that manages Qatar's oil and gas revenues. So, Qatari Diar is the mechanism by which Qatar's petroleum profits are invested in foreign real estate.

The chairman of Qatari Diar is Sheikh Hamid bin Jasim bin Jaber al-Thani, who must be a Grandmaster of multi-tasking since he is also Qatar's Foreign Minister and its Prime Minister. I have to admire how the Qataris cut down on red tape and bureaucracy. It looks like Sheikh Hamid can think up a foreign investment proposal, give it the diplomatic green light, and make an executive decision to implement it, all by himself. He could probably hold an entire Qatari cabinet meeting in the back seat of his limo while riding to work in the morning!

The most impressive thing I've learned about Sheikh Hamid is that, according to his Wikipedia entry, he owns a stake in Qatar Airways. QA is my favorite airline in the whole world, and I highly recommend you fly it if you ever get the chance. They have espresso machines in business class!

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