By Satish Kanady
DOHA: The Industrial Area continues to be in high demand in Qatar’s real estate market. Nearly all plots in the old areas are leased out for warehouses, car shops and the like. Rentals have gone up again and for a warehouse the rate starts from QR35 per square metre for a simply-build store to more than QR60 per square metre for new warehouse-space, a latest real estate market study by Engel & Volkers has said
The rates for newly built labour camps have increased and compared to last year January, the rates rose about 20-30 percent. Demand for labour camps will continue to rise as more projects are expected to start during 2012.
Qatar is well on the way to recovery from the downturn in 2009-10. “We are now seeing more property developments and projects which were on hold for a long time, have now resumed with their construction works,” Engel & Volkers report said.
On the commercial market, the report said, most offices in West Bay are available between QR160 to QR190 per square metre. Not many buildings in this location still achieve rents in excess of QR200 per square metre and these rates are very dependent on the layout, quality, image of the tower as well s the offered service/maintenance and the kind of tenants located already in the building.
The Airport Road has seen rents stabilising after a downturn in 2009, and currently the rates are between QR130 and QR160 per square metre. There seems to be a good level of demand from companies for areas like Old Salata (Corniche) Area, where new towers have sprung up during the last year and rents are in area of QR110 to QR140 per square metre.
Most of the demand from new companies arriving in Qatar is for the smaller spaces, between 150 to 300 square metres, though we have seen a significant increase in requests for companies searching for offices at around the 1,000sqm size since the last quarter of 2011.
“Overall, the market is still experiencing an oversupply of office space but it seems at a tolerable level, since most of the government ministries, banks or oil and gas companies are occupying a whole tower or a large part of them.”
Premium towers will continue to dominate the local market but only in the short run, since bigger developments, such as Msheireb Downtown and Lusail City will cause a change in the current market.
The retail market experienced a minimal movement during 2011, with a partial opening of The Gate and The Lagoona Mall in West Bay area. Further, malls are expected to enter the market in the coming years. These include Ezdan Mall, Gulf Mall and Al Markhiya Mall which are projected to open within 2012 and provide approximately 175,000 square metres of leasable area.
Engel & Volkers expects to see more international brands to be introduced into the market, as more and more malls are currently under construction.
Current rental price for a retail component in prime areas, such as that of Porto Arabia at The Pearl, varies between QR200-QR350 per square metre. The price range is similar to retail shops in high-end luxury shopping malls like Villagio, Landmark or City Center.
Qatar’s residential market has remained reasonably stable throughout 2011 with noticeable improvements in both the sales and the leasing market. The growing population produced a strong demand in the residential leasing market and will continue to be one of the main drivers in these sectors.
The sale market was relatively quiet over 2011. There was sufficient supply of properties for sale, yet the asking price did not match with the buyers’ expectations, therefore, creating a wide gap between supply and demand.
On the rental market, Engel & Volkers have observed a decrease of rentals levels from the peak of the market in 2008 which was mainly caused by the increased level of supply in residential stock.
Apartments in the prime areas such as West Bay continue to be highly sought after, especially among expatriates who are seeking high quality dwellings with recreational amenities.
The number of villa accommodation continuously increased during 2011 and such growth is in balance with the market’s demand. Compound villas with diverse facilities remain to be popular among expatriates.