ANNUAL
REPORT 2023
H.H. SHEIKH TAMIM BIN HAMAD AL THANI | H.H. SHEIKH HAMAD BIN KHALIFA AL THANI |
THE EMIR OF THE STATE OF QATAR | THE FATHER EMIR |
The Barwa brand has become synonymous with careful project identification, timely execution, adherence to quality standards, cost efficiency and prudent fiscal management, complemented by valuable local expertise. Straddling the residential, commercial, mixed-use and hospitality sectors, we continuously strive to produce a well- balanced portfolio that is geared towards consistent income-generating annuity assets.
Our strategy is centered on keeping our portfolio optimized, by aligning it with market and stakeholder demand, while being focused on long-term value creation.
We have invested wisely in a well-proportioned development pipeline that adds further diversity to our portfolio, and enables us to capitalize on future market opportunities in a thoughtful and risk-mitigated way.
By diversifying into the education-based assets, PPPs and other well studied opportunities, we aim to further insulate ourselves from economic-cycle swings.
By adding mid-to-high residential units to our portfolio, we aim to strengthen our holdings of annuity income-generating assets and further bolster our ability to produce free cash-flows.
To enable a more sustainable payback from our new freehold positions taken in emerging areas such as Lusail, we aim to add the "built-to-sell" model
as part of a judicious portfolio mix that yields appreciable returns.
With efficient capital allocation, well-conceived projects, operational excellence and efficient corporate structures, we are on the path to strengthening our position as a multi asset-class realty major.
TABLE OF
CONTENTS
OVERVIEW
Barwa at a glance | 10 |
Financial highlights | 14 |
What we do | 16 |
Where we do it | 18 |
STRATEGIC REPORT
Board of Directors report | 22 |
Six compelling reasons to invest in Barwa | 32 |
Message from the group Chief Executive officer | 34 |
Our market drivers | 36 |
Our well positioned development pipeline | 38 |
Freehold zones a growing opportunity | 40 |
Securing Barwa's ICT framework | 41 |
Actively managing risk | 42 |
Our people: Bringing Barwa's vision and values to life | 46 |
Our commitment to community | 48 |
Real estate projects in Qatar | 50 |
Qatar real estate investments | 52 |
International real estate investments | 63 |
Independent subsidiaries | 64 |
International Associate Companies | 66 |
Board of Directors | 68 |
CORPORATE GOVERNANCE REPORT
Corporate Governance Report | 72 |
Appendix (1) Board Member CVs | 92 |
Management Assessment of | |
Internal Control over Financial Reporting | 94 |
Shari'a Supervisory Board Report | 96 |
FINANCIAL REPORT
Independent Auditor's Report | 100 |
Consolidated statement of financial position | 104 |
Consolidated statement of profit or loss | 105 |
Consolidated statement of comprehensive income | 106 |
Consolidated statement of changes in equity | 107 |
Consolidated statement of cash flows | 108 |
Notes to the consolidated financial statements | 110 |
BARWA AT GLANCE
Barwa is one of the leading real estate developers, headquartered in Doha, Qatar. We develop and manage properties that reflect the changing needs of the people living, working and visiting the country.
COMPANY VISION AND STRATEGY
STRATEGIC DIRECTION
• Barwa's fundamental strategic direction | • Barwa will make balanced income yielding | |
is to be a real estate development and | investments in both its core real estate and | |
investment holding company. | synergistic businesses with above market return | |
on investment. |
The Segmented Business Model is organized around the following elements:
CORE BUSINESS
Real Estate Development,
EFFECTIVE GOVERNANCE
(Proper Control & Risk
SYNERGISTIC BUSINESSES
Subsidiaries (Controlling stake) Private
VISION
To be a reliable real estate
MISSION
To create better places in an
VALUES
Entrepreneurship,
Investments and Operations (Value Creation): We will establish the Barwa way of planning and delivering projects and will replicate the model to the expanded and emerging portfolio.
Management): Investment management best practices and performance management that sustain the value proposition.
Equity (Diversifies and enhances revenue stream)
- Well-balancedportfolio.
- Supporting profitability and sustainable growth.
- Enhance credibility and strengthen the brand geographically.
company recognized for its strong values, excellence and sustainable returns to its stakeholders.
effcient manner for people to
live, work and enjoy.
commitment, reliability, teamwork and integrity.
ABOUT OUR PORTFOLIO
QR | QR |
27 mn. | 1,391 mn. |
Properties available for sale | Properties under development |
2.02 mn. sq. m. | QR |
36,138 mn. | |
Land bank available | Total properties book value |
(Real Estate & Land Bank) | |
QR | QR |
8,160 mn. | 27,978 mn. |
Book value of land bank | Book value of real estate |
10
11
BARWA AT GLANCE CONTD...
OUR FINANCIAL STRENGTH
QR
39,986
2.97%mn.
Return | Total assets |
On Assets |
10%
CAGR - Rental
Income (FY2019-
2022)
WHAT WE HAVE ACCOMPLISHED
QR
15,581
mn.
Net debt
5.5
mn. sq.m.
BUA Under
Operation
*BUA Built-up area
Balanced Portfolio Of Assets (BUA distribution)
5.40%
Return
On Equity
94%
Operating
profit from net
recurring rentals
Land Bank
Balanced Product Mix | Net debt:Equity mix of | Leadership |
Resulting in a stable yield | 73% | in affordable housing |
Landbank of | QR 7,18 billion | 14,069 |
1.95 mn. sqm | Total number of residential units | |
Dividend distributed for | ||
in Qatar, 46% owned | 55,129 | |
years 2014 to 2022 | ||
Workers rooms |
12
Schools | 2% | Warehouse | |
1% | 8% | ||
Commerical | 9% | ||
Mixed Use | |||
Local | |||
96.5% | |||
Workers | 40% | ||
accommodation | 40% Residential | ||
3.5%
International
13
FINANCIAL
HIGHLIGHTS
Total Income | Operating Revenue | |
2,714 | 2,623 | 1,708 | 3,764 | 3,454 | 3,354 | 2,586 | 1,155 | 1,509 | 1,438 | ||||
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2015 2016 2017 2018 2019 2020 2021 2022 | |||||
TOTAL INCOME AND OPERATING REVENUE | OPERATING PROFIT |
QR in Million | QR in Million |
3, 228 | 1,764 | 1,838 | 2,054 | 1,874 | 1,642 | 1,477 | 1,673 | 3,069 | 1,619 | 1,716 | 1,917 | 1,505 | 1,215 | 1,119 | 1,151 |
2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
EBITDA | PROFIT AFTER TAX |
QR in Million | QR in Million |
14
31 | 50 | 57 | 31 | 28 | 61 | 57 | 51 | 51 | 40 | 61 | 60 | 3.3 | 6.0 | 5.6 | 4.6 | 5.9 | 6.9 | 6.8 | 6.4 | 6.5 | 3.7 | 5.0 | 6.4 | |||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 |
DIVIDEND PAYOUT RATIO | (%) | DIVIDEND YIELD | (%) |
807 | 826 | 841 | 493 | 437 | 563 | 991 | 747 | 389 | 584 | 778 | 856 | 856 | 973 | 973 | 973 | 778 | 486 | 681 | 681 |
2015 | 2016 | 2017 2018 2019 2020 2021 2022 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | |||||
RECURRING CASH PROFITS | DIVIDENDS |
(excl. profit from sales of property) QR in Million | QR in Million |
15
WHAT WE DO
This is how we allocate our capitals to create value. Our ability to generate value is dependent on our access to five different capitals: portfolio; funding; relationships; team; and sustainability.
OUTPUTS
OUTCOMES
PORTFOLIO CAPITAL
The Company's updated strategy focuses on active asset management to ensure maximized returns from existing portfolio while also developing new opportunities.
TRADE OFFS
PORTFOLIO CAPITAL
The Company's property portfolio has a long-term investment horizon. Strong investment discipline is required to mitigate the risk of sacrifcing long- term growth for shorter-term distribution growth targets.
INPUTS
PORTFOLIO CAPITAL
The Company's investment property portfolio:
- QR 201 million Properties available for sale
- QR 3,388 million Properties under development
- 2.02 million square meters land bank available
FUNDING CAPITAL
Effective capital management:
- Share Capital of QR 3,891 million
- QR 10,083 million of outstanding debt
- QR 9,337 million of net debt
- 0.46 Net Debt to Equity Ratio
- Recurring cash flows in form of rental income
SUSTAINABLE CAPITAL
To make positive difference:
- Investing in communities in which it operates
- Use of natural resources in a responsible and effective manner
RELATIONSHIPS CAPITAL
Value created with stakeholders:
- Close working relationship with development partners in invested markets
- Investor confidence established through regular communications
- Engagement with local communities and Governments
TEAM CAPITAL
Knowledge and expertise of our team:
- Skilled diversified Board
- Talented people
- Continued investment in established systems and processes,
- Strong corporate governance
OPERATIONAL
FRAMEWORK
AQUIRE
The Company's strategy is to grow the income in a sustainable manner. To enable this, the Company sources the best opportunities in its invested markets.
A robust appraisal process facilitates effective allocation of resources to acquire accretive property.
DEVELOP
Through active engagement with tenants and communities, the Company develops properties to meet the needs of prospective tenants and their customers.
MANAGE
The Company actively manages the investment portfolio to maximize
shareholders returns.
Optimise
The company optimises the allocation of capital by mature assets where value has been extracted and redeployed into opportunities for growth.
FUNDING CAPITAL
Barwa's strong balance sheet gives suffcient room for levered growth with prudent gearing. During the year, the Company took QR 1,962 million additional debt.
The increase in debt has resulted in a rise in the net debt to equity ratio to 0.46 from 0.41. The Company achieved distributable earnings per share for the year of QR 0.31, compared to QR 0.39 in the previous year. A distribution of QR 0.125 per share was declared in relation to the earnings for the year.
RELATIONSHIPS CAPITAL
Stakeholder communication is vital for active stakeholder engagement, which is fundamental to the Company's ability to create long-lasting relationships. During the year the Company interacted with various institutional investors, availed quarterly result update conference calls and with the help of proactive and dedicated Investor Relations team it also interacted with analysts whenever required.
TEAM CAPITAL
The Company has established a strong team with extensive knowledge and experience across its invested markets. Throughout the year, several initiatives were completed to enhance, attract, motivate and retain the team. The Company has robust and reliable processes and operating systems in place.
SUSTAINABLE CAPITAL
The Company recognizes the importance of using natural resources responsibly and effciently to ensure they are sustainable for the environment. Also, it recognizes the importance of investing in the communities in which it operates, and it is at the heart of all its capitals.
FUNDING CAPITAL
Investment in team and relationships capital can impact the funding capital and distribution to shareholders in the short term but has a positive impact in the long term.
RELATIONSHIPS CAPITAL
The investment in the Company's relationships capital allocates time from the other capitals and has a negative impact on the funding capital. In the long term, there is a positive impact on the other capitals.
TEAM CAPITAL
Investing in the Company's people is imperative to generate sustainable and long- term growth. Investing in the Company's systems and processes has a negative impact on funding capital in the short term. However, once implemented, there is a positive impact, improving the quality of information and increasing effciency and staff morale.
SUSTAINABLE CAPITAL
Investing in sustainable solutions increases our sustainable capital but has an impact on funding capital in short to medium term. Through effciencies and renewable sources of energy, there is a positive impact of fnancial capital in the long term.
16
17
WHERE WE
DO IT
Our portfolio is concentrated in areas expected to benefit from strong occupier demand with limited supply of competing products.
► LOCAL (QATAR) PORTFOLIO BY BUILT UP AREA (SQUARE METERS)
Barwa Real Estate Company
5
1 | |
% | |
4 | |
2 | |
3 | |
1. Residential | 32% |
2. Mixed Use | 11% |
3. Warehouse | 10% |
4. Labor | |
Accomodation | 45% |
5. School Package 1 | 2% |
Residential
Total BUA
5 | 6 | |
4 | ||
3 | ||
% | 1 | |
2 |
1. Madinatna | 49% |
2. Al Khor Community | 30% |
3. Masaken Al Sailiya | 7% |
4. Masaken Mesaimeer | 7% |
5. Al Khor Shell | 4% |
6. Others | 3% |
Industrial
Total BUA
1 |
% |
2 |
1. Umm Shaharian
Warehouses59%
2. Al Baraha Workshops | |
& Storages | 41% |
Workers Accomodation Total BUA
5
4
1
3%
2
1. Argentina Neigborhood | 35% |
2. Mukaynis Compound | 34% |
3. Barwa Al Baraha | 23% |
4. Alkhor Recreation | 3% |
5. Others | 5% |
Mixed Use & Commercial Total BUA
6 | |||
1 | |||
5 | % | ||
4 | |||
3 | 2 | ||
1. Barwa Al Sadd | 36% | ||
2. Barwa Village | 34% | ||
3. Barwa Village Extension | 6% | ||
4. Madinat Mawater | |||
(Phase1) | 5% | ||
5. Madinat Mawater | |||
(Phase2) | 5% | ||
6. Others | 13% | ||
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Disclaimer
Barwa Real Estate Company QSC published this content on 04 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 04 March 2024 11:45:06 UTC.