Lower oil & gas prices have impacted Doha’s commercial real estate market

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real estate market

Qatar’s leading global real estate company, DTZ, release edits Q1 2015 market report for Qatar today. Among many findings, DTZ’s research team identified decreased requirements on the commercial and residential real estate markets from the hydrocarbon sector as budgets have been cut due to the steep drop in oil and gas prices. However, the increase in the country’s overall populationcontinues to fuel the residential market. In some locations, rents have risen between 5 percent-10 percent for mid-range apartments while it is expected that the availability of new apartments in the Pearl Qatar and West Bay will help ease rental inflation for higher end apartments.

In the sales sector, average freehold prices for apartments range from QAR 12,500/sqm to QAR14,000/sqm. Three new hotels opened in the first quarter of this year, adding approximately 760 keys to the hospitality sector.

Commenting on the findings of DTZ’s latest report, Mark Proudley, Associate Director, Consultancy and Research, DTZ, stated:

“Over the past 12 months up to the end of March 2015, the population realised an increase of 9.5 percent according to the Qatar Statistics Authority. This along with new apartments entering the market has contributed to the growth of the residential market despite the impact caused by lower hydrocarbon prices. In the hospitality sector, the market will continue to feel the impact of Qatar’s obligations to FIFA with regard to the number of hotels required by 2022. This commitment will create pressure on positive growth in occupancy levels as new hotel room stock enters the market.”

Edd Brookes, general manager of DTZ in Doha, stated:

“The increasing maturityof Qatar’s real estatemarket is now becoming evident. The slowdown caused by lower hydrocarbon prices has been balanced bythe growthin residential demand caused by a rapidly expandingpopulation. This speaks volumes for the strategic direction of the nation, particularly in terms of economicdiversification. The retail market has also seen significant growth of 17 percent in this quarter as a result of a new mall opening.”

Brookes continued:

“DTZ Qatar has the distinction of being the oldest international real estate agency operating in this market, and our aim has always been to grow sustainably along with the market. We will be announcing our own growth plans in the coming weeks and thesewill demonstrateour commitment toQatar’s strengthening and maturing real estate market.”

There have been few significant transactions with regard to office lettings in the first quarter of 2015. While the number of large scale acquisitions is likely to reduce due to the lower hydrocarbon prices, DTZ expects to see an increase in smaller lettings to the private sector. DTZ estimates that there iscurrently less than 150,000 sqm of vacant offices available to rent in West Bay, which represents less than 9% of total supply. Of the available space, however, there is a limited choice for those looking for less than 500 sqm in West Bay.

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