Qatar Holding LLC, the investment arm of the country’s sovereign-wealth fund, plans to open Harrods hotels in cities including London, New York and Paris to build the British luxury retailer it bought two years ago into a global brand.
“We have already decided to build a Harrods Hotel in London, one in Kuala Lumpur and one in Sardinia, Italy,” Qatar Holding Vice Chairman Hussain Ali Al-Abdulla told reporters in the Malaysian capital today. “We are looking to invest more in Malaysia because we think the economy is growing.”
The Doha-based fund signed an agreement with Malaysian partners today to build a hotel in Kuala Lumpur’s Bukit Bintang shopping district, Hussain said. About 2 billion ringgit ($634 million) will be spent on the development and construction will start in a year. It didn’t provide specifics about plans for London or Italy.
Qatar Holding paid 1.5 billion pounds ($2.3 billion) for Harrods in 2010, including its landmark store in London’s Knightsbridge district, which opened in 1849 and counted Sigmund Freud and Oscar Wilde among its customers.
The fund will establish a hotel-management company to seek out projects around the world. It prefers to build on sites already owned by Qatar Holding or its affiliates, such as London’s Chelsea Barracks site or Sardinia’s Costa Smeralda, according to a joint statement by Qatar Holdings and Harrods Ltd.
“Qatar Holding ultimately intends to grow Harrods into a global enterprise that defines the luxury retailer and leisure sectors,” it said.
In April, the fund agreed to buy luxury hotel owner Smeralda Holding from Colony Capital LLC. The purchase included four hotels in Costa Smeralda on the Italian island of Sardinia, as well as a golf course, marina and undeveloped land. Starwood Hotels & Resorts Worldwide Inc. will continue to run the hotels.
Qatari Diar Real Estate Investment Co., a Qatari Investment unit, purchased the Chelsea Barracks in west London in January 2008 in a joint venture with Christian Candy’s CPC Group Ltd. A plan to develop the former military site into homes became mired in a dispute over the design and legal clash that ended when Qatari Diar bought out CPC’s share of the project in 2010.
The planned Harrods hotel in Kuala Lumpur will have about 300 rooms and will be the group’s first in Asia, Al-Abdulla said. The company also plans to open in China.
Qatar Holding is part of the Qatar Investment Authority, which is the largest shareholder in the J Sainsbury Plc grocery chain in the U.K. Qatari Diar also owns most of the former Royal Dutch Shell Plc headquarters in London and in August it purchased the athlete’s village at the London 2012 Olympic site for 557 million pounds in a joint venture with Delancey Estates Plc.