Doha: With about 70 percent of the anticipated 1 million square metres (sqm) of Gross Leasable Area (GLA) of office space completed during 2019, the total office stock reached 4.8 million sqm by the end of 2019, witnessing an increase of nearly 16 percent compared to an estimated 4.14 million sqm of office GLA at end of 2018, findings of a latest real estate report show.
According to the fourth quarter review report (Q4 2019) released by real estate consulting firm ValuStrat, five office projects were added during Q4 in Lusail, Al Mirqab, C-Ring Road (Al Mansoura ) and Al Sadd comprising 160,000 sqm GLA.
The supply of office space is expected to continue increasing in 2020 as more projects are to be completed this year. Upcoming projects in 2020, currently under development totalled 1 million sqm GLA, and 80 percent of which are located in Lusail area which include Fox Hills, Energy District and Marina District, Al Dafna and Musheireb Downtown whereas the remaining mixed amongst Duhail, Nuaija, Al Hitmi, Al Sadd, Umm Ghuwailina and Al Muntazah.
The new supply to the existing stock of office space is likely to put additional downward pressure in the asking prices, which is expected to vary from area to area.
According to ValuStrat findings, the median office asking rents fell 17 percent year-on-year (Y-o-Y) and 1 percent Q-o-Q. For instance, about 2 percent quarterly drop in rents was observed in Lusail, as median monthly asking rents declined to QR88 per sqm. Newly opened buildings offered asking rents that ranged from QR95 to QR125 per sqm depending on size, quality and view with rent-free period up to 3 months.
The offices located along Salwa Road experienced the highest quarterly decline in asking rents up to 3 percent, with rates that ranged from QR65 to QR00 per sqm. And the offices listed for sale in Lusail had asking prices that ranged from QR16,250 per sqm to QR 20,500 per sqm.
With regard to retail supply like commercial space in malls and other commercial complexes, it grew 5 percent Y-o-Y during 2019 reaching up to 1.89 million sqm GLA by Q4 2019.
Due to delayed deliveries, an estimated 462,000 sqm (Boulevard Mall in Jeryan Jenaihat, 04 Mall in The Pearl, J Mall in Al Markhiya, Place Vendome in Lusail and Doha Mall in Al Maamoura) of organised retail space is projected for completion in 2020. Based on GLA and population figures, shopping centre GLA in Qatar is 660 square meters per 1,000 capita compared to the GCC average of 620 square meters per 1,000 capita.
In terms of performance, the retail market continued to remain tenant friendly in 2019 with landlords offering lucrative incentives (e.g. waiving service charges or turnover rents) to retain existing retailers and attract new leases.
The median monthly asking rents among street shops in Doha was QR182 per sqm, down by 5 percent Q-o-Q and 13 percent Y-o-Y. The shops located along C-Ring Road, Fereej Bin Mahmoud, Fereej Abdul Aziz, Lusail and Najma observed the highest fall in quarterly rents by an average 14 percent.
The median asking rents among street retail units outside Doha was QR172 per sqm, fell by 9.5 percent Y-o-Y. When compared on quarterly basis, the remained unchanged in Q4 compared to Q3, 2019. The shops located outside Doha such as in Al Khor and Salwa Road registered the highest fall in quarterly asking rents of up to 15 percent.
