Q3 2015 Qatar Market Report: Retail Market Overview
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. Gulf Mall, which opened earlier this year is the last major addition to the Qatar retail market. The overall supply of organised retail accommodation in Qatar stands at 643,000 sq m, which is split between 14 purpose built retail malls. The two largest centres, Villaggio Mall and City Centre Mall account for 39% of the current supply. 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. There is currently strong demand 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 throughout 2015.
Rents in prime malls currently range from QAR260 to QAR300 per sq m per month for the standard line units, although larger anchor stores tend to secure accommodation for between QAR40 and QAR80 per sq m per month. The limited space available in existing prime retail malls has resulted in strong pre-letting activity at a number of the new malls under construction. A large number of international brands committed to the various new developments including Mall of Qatar, Doha Mall, Doha Festival City and Place Vendome.
DTZ estimates that in excess of 1.3 million square meters of retail space is currently at various stages of design or 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 dynamic of the retail market in Qatar.
The showroom retail market, which includes properties on Salwa Road and in Barwa Commercial Avenue has been transformed by the arrival of the latter, which increased supply by approximately 250,000 sq m. This has resulted in rents softening as vacancy levels have increased – notwithstanding the strong initial take up in BCA. Showroom rents typically range from QAR120 to QAR170 per sq m.
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