Q4 2015 Qatar Market Report: Office Market Overview
Office Market Overview
DTZ estimates that between 2008 and 2014 approximately 65% of office space in West Bay has been leased either by government or hydrocarbon related companies. The fall in oil prices has resulted in government bodies and oil and gas companies withdrawing from the market, which has resulted in a significant drop in the overall demand for office space.
The majority of enquiries for office accommodation relates to requirements of less than 250 sq m, however the demand from the private sector has also fallen in the past 12 months. In order to maintain current occupancy levels in 2016, there needs to be an increase in activity both from the public and private sectors. According to our latest analysis there is currently more than 1.6 million sq m of purpose built office space in West Bay, which represents approximately over 40% of the supply of purpose built office accommodation in Doha.
Despite a fall in demand for office accommodation, availability levels in West Bay remain relatively low at 8% of built stock. DTZ estimate that there is currently in the region of 130,000 sq m of vacant offices available to rent in West Bay, much of which is available only as ‘single let buildings’. This has resulted in rents remaining stable, or in some cases increasing throughout 2015.
Approximately 300,000 sq m of new office accommodation is likely to complete in West Bay within the next 12-18 months, which will increase supply levels, however over more than 200,000 sq m of this is at the QP District, which may not be available to the market. In the longer term, once developments complete in Lusail, the large supply pipeline may result in downward pressure on rental levels as landlords compete for new tenants.
Grade A offices in West Bay currently command up to QAR280 per sq m per month for small suites of less than 500 sq m. Rents of QAR160 per sq m per month are achievable for large lettings, or lettings in buildings of lesser quality.
Elsewhere, office rents in secondary locations such as Old Salata, Al Sadd, Airport Road, and C/D Ring Roads typically command between QAR120 and QAR180 per sq m per month, depending on the age and the standard of finish of the building.
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