DTZ Quarterly Report Qatar Q4 2017: Office Market Overview - Apartments and Villas For Rent In Qatar - DTZ

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February 7, 2018

DTZ Quarterly Report Qatar Q4 2017: Office Market Overview

Activity in Q4 saw the Ministry of Prosecution relocate to Al Jasimya Tower on the Corniche, and a number of floors being leased in the recently opened Al Ashmakh Tower on Majlis Al Taawon Street in West Bay. Elsewhere leasing activity in the prime office market was largely limited to lettings of less than 1,000 sqm.

New demand from the government and the hydrocarbon sector has been subdued due to fiscal consolidation introduced following the steep drop in oil prices between 2015 and 2016. Between 2009 and 2014 the acquisition of entire buildings by government ministries and petrochemical companies drove demand in the office sector.

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It is expected that government initiatives to grow the private sector will increase office demand in the in the next 12 to 24 months, however reduced government activity, and new construction means it is likely that occupancy rates will continue to fall in the short term.

The majority office demand from the private sector relates to units of between 200 sq m and 500 sq m. This typically equates to between a quarter and a half of a single floor in a high-rise office tower. New office buildings in West Bay and Lusail are increasingly willing to provide smaller suites to meet this demand.

There is currently approximately 1.65 million sq m of Grade A office accommodation in West Bay, excluding the QP District, which will add a further 230,000 sq m when completed. A further 195,000 sq m is now either occupied or available to lease in Lusail’s Marina District. Overall commercial office supply in Doha is estimated to be in excess of 4 million sq m.

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There is currently in the region of 320,000 sq m of Grade A accommodation available to lease in West Bay, which reflects an availability rate of approximately 20%. In DTZ’s opinion, occupancy rates are likely to come under increasing pressure as new supply is delivered in a variety of locations, including Lusail, Msheireb and West. The additional supply is also likely to reduce market rents.

Office rents in West Bay for full floor suites currently range from QAR130 and QAR170 per sq m per month although rent free periods are increasing common to attract a limited pool of new tenants. Rents in excess of QAR200 per sq m per month, are still achievable for units of less than 250 sq m.

Offices in areas such as Old Salata, Al Sadd, and Airport Road, now command rents of between QAR90 and QAR140 per sq m per month, depending on size, quality, fit-out and location.

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For more insight and further information on Qatar’s residential market, please click the link below to download the full report.

DTZ Quarterly Report Qatar Q4 2017

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