According to a Colliers International report, the Qatar economy has become one of the most vibrant in the Middle East and the world at large, on the back of its hydrocarbon reserves.
The World Economic Forum Global Competitiveness Report for 2011-2012, ranked Qatar at No. 14, on the list of the world’s fastest growing economies, overtaking other countries in the region including United Arab Emirates (UAE), Bahrain and Kuwait.
Qatar Real Estate Market leads growth in the Middle East
High GDP growth rates, with the expected influx of expatriate population, together with government efforts to diversify the economy, are the primary drivers of growth in the real estate sector. Qatar’s successful 2022 FIFA World Cup bid adds further stimulus to the country’s infrastructure and transportation networks, creating more value towards sustainable real estate assets.
Doha’s residential, office and retail markets are as presented in a brief synopsis below:
- Currently an undersupplied market, although depressed consumer confidence post-recession have influenced a downward trend in prices
- An influx of population, supported by economic growth and employment opportunities continue to remain the key drivers for residential demand
- Quality units, in terms of build quality, finishes and facilities are performing significantly better than average units across the market and have seen early signs of recovery
- Currently, an oversupplied market
- After continuous price declines since 2008, a stabilisation of rentals, especially within primary grade commercial space has been observed during 2011- 2012, mainly due to an increase in market confidence and improved economic opportunities
- There has been notable tenant movement towards central areas such as West Bay, representing a flight to quality, as rentals have become more affordable
- An undersupplied market, which is likely to move to an oversupply situation by 2014, provided construction timelines are met
- Going forward, the oversupply will apply potential downward pressure on rental rates and may result in an increase in vacancy rates across shopping malls
- As an outcome of these two scenarios, secondary/ less leading malls are likely to reposition themselves with more tenant-favourable terms such as rent free periods, capital contribution and other softer deals in order to encourage and/ retain existing tenants.