Qatar has put its largest single investment in London on hold due to their failing economy, according to the Guardian on Monday.
The oil-rich state has placed the £3bn Chelsea Barracks housing development on hold and may even sell the land without starting construction a source close to the matter states.
The area has jokingly been dubbed the a “Gucci Ghetto” as it was slated to be home to 450 luxurious residences and 123 affordable homes.
Qatar’s property giant, Qatari Diar, ,planned the project which included a seven-bedroom mansions as well as one-bedroom flats. With £1 billion at risk, the site now stands alone with weeds growing through the concrete.
“It now seems a huge gamble to deliver all of this,” a Qatari source told the Guardian. “[The developers] will take their time and see how the numbers stack up in due course.” He added that while the scheme could still be built, “they could sell [the site] any time.”
Qatar is considered one of the richest countries in the world per capita and already owns 80% of the Shard, the tallest building in western Europe, all of Harrods and the U.S. embassy in Mayfair and is a co-owner of the Olympic village and the Shell Centre on the South Bank.
Qata’s newest project was reconsidered as the latest UK’s economic data shows Britain going for a triple-dip recession.
"The strategy is under review," confirmed a Qatari Diar spokeswoman. "[The developer] is taking advantage of the opportunity to review and respond to the context of the prevailing economic environment in preparing for the next stage of the development."
Qatar has said the development is part of a plan to use property investments to “redefine Qatar and create a sphere of influence in London”. Qatar’s purchase of the site in the royal playgrounds of Belgravia and Chelsea was geared towards gaining geopolitical power as well as diversifying its wealth.
The original design, by the modernist architect Richard Rogers in 2009, was scrapped as Prince Charles personally complained to the prime minister of Qatar, Sheikh Hamad bin Jassim bin Jaber al-Thani. He said the planned building was a “gigantic experiment with the very soul of this city.” Prince Charles has urged Qatar instead to “bequeath a unique and enduring legacy to London.”
Rogers was dismissed and the prince's architectural advisers were signed to help draw up a brief to choose a more traditional design, which royal aides have Okayed.
The politically and militarily volatile Gulf country, does not wish to hamper its foreign relations over an architectural difference in opinions.
Some have questions Doha’s decision to halt the plans.
A source recently working on the project said: “It's odd they're not doing anything because the residential markets are really rolling right now.”
Residing in what estate agents call the “super-prime” SW1 postcode area of west London, many of the flats would sell for more than £10m, a price-end that has seen a 40% rise in prices from the market upturn in March 2009 to June 2012, according to data from the estate agents Knight Frank. The number of sales in SW1 rose rapidly by 29% between 2011 and 2012.