The overall office supply in Doha has increased to approximately 4.9 million square metres (sqm) at the end of September 30, 2020 (Q3, 2020), and out of that more than 30 percent of office accommodation is situated in West Bay, Qatar’s central business district, according to latest report.
Cushman and Wakefield’s Q3 Market Review report noted that the demand for office space has reduced as COVID-19 pandemic has put corporate strategies on hold.
The leading real estate advisory firm has also said that more than 11 percent of office space is in Lusail’s Marina District, where supply has doubled over in the past 24 months.
“The rapid increase in supply has seen vacancy rates reach more than 60 percent in the Marina District - twice the overall market level – however, increasing interest from occupiers is likely to see a significant increase in office take-up in the district over the next two years,” added the report highlighting the office market overview.
“As the Marina District (in Lusail) matures, we expect to see tenants attracted by competitive rents, transport and parking provisions, and the increasing amenities and F&B on offer. New office demand has reduced over the past six months, as many companies re-assess their corporate strategies due to the COVID-19 pandemic.”
Lulu Hypermarket, the leading retail chain of the region, last week opened its 14th store at The e18hteen Tower-Marina, Lusail City, which is expected to play important role in driving the demand for office as well as residential units in the Qatar’s ambious city. The new store that offers 2,000sqm retail area has further strengthened the retail giant’s presence in the region and is hailed to become the first retailer in the Lusail City.
Khalifa Al Maslamani a Qatari real estate market expert, told The Peninsula yesterday that rentals in almost every sector of the property market, including office and commercial space is down due to more supply and limited demand, but it is a temporary phenomenon which is bound to recover in coming days.
“It is true that rentals in the office space are nearly 30-40 percent down from their peak, but with massive investments in new projects in other sectors of the robust economy, real estate market is gradually moving on the recovery path,” added Al Maslamani.
“Just look at the weekly real estate transactions during the post-lockdown period. The numbers are really very encouraging. In addition, billions of riyals worth of projects are being implemented in different parts of the country, including in Al Wakra area, will definitely have positive impact on the market and boost demand for all kinds of properties in the coming days.”
Cushman and Wakefield’s noted that increased economic uncertainty has resulted in some proposed office acquisitions and relocations being put on-hold in 2020, while there has also been evidence of companies in Qatar deciding to downsise their office requirements.
“The recent lack of rental activity and increasing availability is continuing to put downward pressure on office rents and increase the incentives on offer to attract occupiers. CAT A (category A) and fitted office space in West Bay is typically available for between QA 100 and QA140 per sqm per month exclusive of service charges, although tenants can secure rent-free periods on some buildings. Prime, CAT-A specification offices in Lusail are available for QR90 to QR120 per sqm per month, reflecting the fact that it is a new district trying to attract tenants and build occupancy rates,” said the report.
Shell-and-core offices are now available to lease for between QR80 and QR100 per sq m per month in West Bay, and in secondary locations it can be leased for as little as QR60 per sq m per month.
