Birmingham seeks Middle East sovereign funds

Birmingham council leaders are in talks with Middle East sovereign funds, hoping to plug a budget hole selling some of the billions of pounds of trophy assets owned by Britain's second city.

The NEC -- Britain's biggest exhibition centre, prime real estate and a stake in Birmingham Airport could all be up for grabs, councillors said, as they look to fund big capital projects at a time when the national government is demanding deep spending cuts.

Mike Whitby, leader of Birmingham City Council which represents over 1 million people and describes itself as Europe's biggest local authority, said he had been approached by sovereign wealth funds and was talking with the Abu Dhabi government as he tried to forge closer ties to the Middle East.

"We would allow them to be in partnership with our assets including the National Indoor Arena (NIA), the Symphony Hall, the ICC (International Convention Centre) and the National Exhibition Centre (NEC)," Whitby, a member of Britain's ruling Conservative Party, told Reuters.

The NEC Group, wholly owned by the council and which groups together the main exhibition centre as well as other venues such as the NIA and ICC, has fixed assets worth about 750 million pounds ($1.2 billion) according to pre-credit crisis valuations included in the council's most recent annual report.
 
NEC made an operating profit of almost 30 million pounds last year, on revenues of 110 million.

Whitby said wealthy investors had shown a significant level of interest in the city's 'Big City Plan' redevelopment during a recent trip to Kuwait when he spoke to the country's chamber of commerce.

Such asset sales and foreign investment show how councils could invest in infrastructure despite expected cuts of 20-30 percent in their budgets, and would help the government towards its goal of using the private sector to lead economic recovery.

Birmingham's Beorma quarter development, the latest phase in the regeneration of the city centre, has attracted about 200 million pounds from Kuwaiti lead developer Salhia International Investments, Whitby said.

Plans to knock down and relocate the main library and redevelop the site in the heart of the city have also caught the eye of Middle Eastern investors, said Randal Brew, the councillor responsible for finance.

"We have been successful in attracting quite a lot of Arab money, the leader has gone out and marketed the city," Brew said during a recent visit to the city by Reuters reporters. "It is important because it is a new source (of investment)."

Elsewhere, the local business community is busy forging ties with Middle Eastern investors, as highlighted by a visit this month from Sheikh Ali al-Hashimi, advisor in the UAE ministry of presidential affairs.

"We want to see if we can get sovereign wealth attracted to projects in Birmingham," said Noor Siddiqi, a lawyer, who organised al-Hashimi's trip. "London has the attention of most of the world but other regions like Birmingham have a massive Muslim community and can relate to Muslim countries."

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