Qatar’s real estate sector shows rise in transactional volume in Oct, Nov: DTZ Qatar
Qatar’s real estate sector has shown an increase in transactional volume of 8% and 12% in October and November respectively, DTZ has said in its latest Qatar’s Real Estate market review.
Whilst there continues to be a softening in the residential and commercial rental market, this has been driven by supply pipeline and not as a result of the ongoing blockade.
“In fact the Qatar market has shown considerable resilience when compared regionally with, for example, Abu Dhabi that saw residential rents fall by 13%, and Bahrain by 16.2% during 2017,” DTZ Qatar said.
Whilst office rents continue to soften under additional supply pressure, there have been a number of new international occupiers entering the Qatar market during 2017. However, the highest demand remains for occupiers requiring less than 250 sqm.
Whilst prime residential rents have softened by up to 10% over the past 12-month period, the secondary market has shown more resilience over the past year with Ezdan Oasis setting the benchmark in terms of newly built middle-income apartments.
The precise effect that the much-awaited Metro will have on the property market is unquantifiable as yet. The research DTZ has undertaken elsewhere when a new mass transit system comes into operation suggests that cities with a similar climate as Qatar see a 10-15% increase in property values within 50 metres of a metro station, and 5-7% increase when within 50-100 metres distant.
“It remains to be seen as to whether such increases have already been factored in to pricing. Although this is unlikely,” DTZ Qatar.
Total organised retail supply in Qatar is almost 1.3mn sqm, distributed amongst the country’s 20 principle shopping malls, almost doubling the supply from 2014. Amongst new additions in 2018 will be the official opening of Tawar Mall and the completion of Northgate, Katara and Doha Souq.
“The increased supply, coupled with stagnating oil prices, have impacted performance levels and whilst prime retail destinations have maintained headline rents of QR280 sqm per month and higher, the challenging retail conditions have resulted in more landlords adopting turnover rents to attract and retain tenants,” DTZ Qatar said.
According to QTA, hotel occupancy averaged 62% for the first half of 2017, with the Ministry of Development Planning and Statistics noting that occupancy had fallen to 57% in November.
The total hospitality inventory is approaching 25,000 keys, and whilst 70% of properties are 4 and 5 star, there have been some welcome new 3 star entries including the Holiday Inn and Premiere Inn.
A further 10,000 hotel rooms and 2,000 serviced apartments are at various stages of planning and construction.
The impact of enabling visa on arrival/visa-free access to Qatar for visitors from 80 countries will be more quantifiable during 2018 as travellers are able to incorporate Qatar into their travel plans, DTZ Qatar says.
Article Link: Gulf Times