Q1 2016 Qatar Market Report: Retail Market Overview
Qatar is about to enter a period of strong growth in retail supply with a number of new retail malls nearing completion
Despite the large number of retail malls under construction, no new malls have opened since Gulf Mall in early 2015. Based on DTZ’s assessment, the overall supply of purpose built, retail mall accommodation in Qatar is 643,000 sq m, contained in 14 purpose built malls. The two largest shopping centres, Villaggio Mall and City Centre Mall, account for 39% of the current supply.
DTZ estimates that in excess of 1.3 million square meters of retail space is currently at various stages of construction and is scheduled to open by 2019.This represents a 220% increase on current supply, and if completed as planned will have a major impact on the dynamics of the retail market in Qatar.
Qatar has benefitted from strong growth in retail trade in recent years, which has been driven by the increasing population as well as high disposable income. In 2014 the World Bank estimated that the GDP Per Capital GDP (PPP) reached $145,894, representing the highest level of disposable income per capita in the world.
Demand remains strong from retailers looking to either enter the Qatar market, or expand their existing presence. New demand, coupled with the high occupancy levels in all of the existing malls has resulted in strong rental growth in the past 12 months. Rents in prime malls currently range from QAR260 to QAR300 per sq m per month for the standard line units, while larger stores can secure rents of between QAR170 and QAR220 per sq m per month.
DTZ understand that a large number of international brands have agreed lease terms on various new developments including Mall of Qatar, Doha Mall, Doha Festival City and Place Vendome, and strong occupancy rates are expected on these malls when they open in the next 12 -24 months.
The showroom retail market is estimated to comprise more than 800,000 sq m of leasable area in Salwa Road and Barwa Commercial Avenue. Rental levels in these locations typically range from QAR120 to QAR170 per sq m.
Elsewhere, on The Pearl Qatar, Medina Central opened in 2015, and following a period of tenant fit-outs, the majority of retail units have now opened for business. Porto Arabia has also seen an increase in activity with a number of new arrivals on the retail promenade in recent months.
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