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DOHA: Shop rents have been skyrocketing due to a severe shortage caused mainly by demolition of old buildings, and citizens are urging the government to intervene.
People say a law that was enforced in February 2008 to put caps of 10 to 15 percent on annual rent increases by property owners should be re-enacted.
House rents have been showing only marginal upward movement, so there are hardly any worries on that count at the moment, but the situation as regards shops is alarming, businessmen say.
In some cases, shop rents have been raised by the owners by 100 percent, and tenants who are petty traders have no option but to pay through the nose, a citizen said, asking not to be named.
Several old markets in and out of Doha that had large numbers of shops have been demolished, leaving their tenants in the lurch, said the citizen. “These tenants are forced to look for alternative commercial space, which is simply not available.”
The demand for shops is going up steeply, fuelled largely by the demolitions, and there is a severe shortage. Taking advantage of the increasing demand and acute short supply, commercial property owners are increasing rents.
The law that was enforced on February 15, 2008 expired two years later, in February 2010, after which the government withdrew the cap on yearly house rent increases. Due to a shortage of shops the cap on their rents remained in force, but it was withdrawn later.
However, demolition of buildings that had shops on their ground floors, in and outside Doha, continued, which added to the shortages and jacked up demand. “Some property owners are so greedy, they wouldn’t let an opportunity go where they can raise the rent,” said another citizen.
According to him, the end result of the rising rents is that prices have been increasing as shopkeepers are eventually passing on the burden to consumers. “So, ultimately, it is the people who are paying the price for the steep increase in shop rents,” he added.
He said the 2008 law was implemented by the government as house rents had climbed to alarmingly high levels from 2006 due to large-scale demolitions and due to an acute shortage. A result of the steep rise in rents was that inflation in 2008 peaked at a record 15 percent.
The legislation came at the right time and helped stabilise the rental market. “We are facing a similar situation with regard to shops now, so a law that puts caps on annual shop rent increases is urgently needed,” said a shop tenant.