The demand for office spaces in Qatar is likely to see a strong recovery that will help in stablising office rents. With FIFA World Cup Qatar 2022 approaching near, companies are expected to strike new deals to occupy new office spaces.
Majority of the deals are expected to be related to office spaces in prime areas such as Lusail, West Bay and Msheireb Downtown.
“With reforms to investment regulations made in 2021, and the easing of regional restrictions, we expect a boost in demand which may lead to slowing of office rents declines by end of 2022,” said a recent report released by real estate consultancy firm ValuStrat.
Lusail will have a major share in the new office space supply that will be delivered over the next year. Nearly 1.26 million sqm is projected to be delivered in the next year with a major chunk of supply concentrated in Lusail and remaining distributed in Msheireb Downtown, Al Dafna, Onaiza, Umm Ghuwailina and Salata.
The office market in Qatar went through a rough patch during last year. During the first half of the year, the demand for office space was less than expected due to the impact of COVID-19 outbreak.
The median asking rent for offices in Qatar was QR76 per sqm during the second quarter. Offices along C and D Ring Roads experienced the highest quarterly depreciation of up to 6 percent.
Total office stock totalled 5.6 million sq m with the addition of 76,000 sq m GLA during the second quarter of 2021. The supply of offices in Lusail exceeded 1 million sq m GLA.
The recovery in demand gained momentum from the second half of the year as coronavirus cases declined significantly that led pick-up in economic activity and boosted demand from the companies for new office spaces.
During the first quarter of last year, seven office projects comprising 145,000 sqm (Gross Leasable Area) GLA were completed, leading to a total of 5.5 million sq m GLA of office stock. Oversupply was estimated to be 2 million sqm GLA.
New demand for office space has been dominated by companies working in financial & insurance activities, administrative & support services and arts, entertainment & recreation.
The last quarter of last year was full of activities for office market. Promofix, a subsidiary of UAE-based JGroup, announced to open new office in Doha. PwC Qatar expanded its office space in Doha hosting over 350 consultants and experts.
Ministry of Justice opened real estate registration authentication office at Qatar Financial Centre (QFC). During the last quarter, Cabinet approved a draft law regulating the ownership of real estate in the country by diplomatic and consular missions.
According to the ValuStrat report, significant oversupply exceeding 2 million sq m GLA is projected to worsen in 2022 despite the boost to demand, due to projected supply pipeline exceeding 1 million sq m GLA during the year.
