DTZ Quarterly Report Qatar Q2 2018: Office Market Overview - Apartments and Villas For Rent In Qatar - DTZ

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August 16, 2018

DTZ Quarterly Report Qatar Q2 2018: Office Market Overview

Office rents in Qatar are continuing to feel the impact of the increase in new supply, and reduced demand since 2016. Typically, office rents in Doha have fallen by 20-25% since the height of the market in 2015. The fall in office rents has, to a large extent, been welcomed throughout the business community as Qatar strives to increase the competitiveness of its business environment.

West Bay remains the prime office location in Qatar. DTZ estimates that in excess of 30% of purpose built commercial office accommodation in Doha is situated in the West Bay area, which attracts banks, oil and gas companies, government entities and international corporate occupiers. West Bay commands the highest rental levels in the market, with average monthly rents of between QAR130 and QAR150 per sq m on a floor-by-floor basis, while smaller fitted suits can still command between QAR200 and QAR250 per sq m.
Offices in areas such as Old Salata, Al Sadd, and Airport Road are currently available at monthly rents of between QAR70 and QAR110 per sq m, depending on size, quality, fit-out and location.

Total office supply in West Bay currently stands at approximately 1.7 million sq m. While the QP District will increase supply by more than 200,000 sq m, it is anticipated that most new supply will be delivered in the Marina District of Lusail in the next few years. Additional office accommodation in Msheireb and in Energy City is likely to put pressure on occupancy rates, with potential for further reductions in prime rental levels as new supply is delivered.

Recent months has seen a large increase in demand for small office units or serviced office suites. This demand has largely been generated by companies based in the region, who now required a full-time presence in Doha; however, this has not yet translated into a significant absorption of available office accommodation in West Bay or other prime areas.

One of the most notable office transactions of Q2 saw Schlumberger occupy an entire floor of Tornado Tower in West Bay, while Regus have opened serviced offices in Marina Twin Towers in Lusail. Elsewhere, recent market conditions have seen increasing flexibility among landlords in order to attract and retain tenants. Rent free periods of between 2 and 3 months are now commonplace for new leases, while rents on lease renewals increasing reflect current market levels rather than the inflated rents that had been agreed between 2013 and 2015.

 

DTZ Quarterly Report Qatar 2018

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