Doha: Hotel occupancy and Average Daily Rates (ADRs) have improved in Qatar during the second quarter compared to same quarter in 2020 due to the boost from growing domestic tourism, according to the second quarter 2021 review issued by leading regional consulting firm ValuStrat. The real estate report noted a surge in transactions volume and value compared to 2020 and 2019 (pre-COVID). Rents of warehouses also expanded during the quarter.
Pawel Banach (pictured) – ValuStrat’s General Manager, Qatar commented “At the beginning of the second quarter of 2021, restrictions were re-imposed limiting mobility amid rising COVID-19 cases. Operating capacities of commercial outlets were reduced and dine-in at F&B outlets was banned. However, the constraints did not hinder the recovery of the real estate market in Qatar. The volume of transactions surged 46 percent over one year and 34 percent over two years (pre-COVID-19)”.
“Moreover, there was an improvement in the performance of hotel, villa, and warehouse markets. This is evidence of improved buyer confidence stemming from several factors: increasing competitiveness of properties, the introduction of policies facilitating foreign investment, normalisation of relations with GCC countries, and positive reinforcements from holding of World Cup in 2022,” he added.
Softer quarterly declines were recorded for prices and rents of villas. Qatar’s ValuStrat Price Index (VPI) a valuation-based index, that tracks the change in capital values for a representative fixed basket of properties, showed an overall 5.9 percent annual fall in capital values for the residential sector, with a marginal quarterly decline of just 1.1 percent.
As of April 2021, 65 hotels were designated for travellers for quarantine upon return to Qatar. Domestic tourism has primarily led occupancy of hospitality properties with average occupancy during the first two months of 2021 was estimated at 56 percent, up 10 percent YoY. There was also a recovery in the ADR as hotels witnessed an increase of 26 percent compared to the same period last year.
The average capital value of a residential unit stood at QR7,238 per sq m (QR672 per sq ft). More specifically, apartments were QR10,350 per sq m (QR960 per sq ft) and villas were QR5,689 per sq m (QR529 per sq ft).
Seven locations (Al Wakrah, Umm Salal Ali, Umm Salal Muhammad, Duhail, Al Dafna, Old Airport and Muaither) experienced a marginal change of less than 0.5 percent since the previous quarter. The highest quarterly depreciation of 4.7 percent in capital values was observed in the Ain Khaled cluster.
Housing stock totalled 306,515 units with the addition of 1,800 units during the second quarter of 2021. Projects handed over during the quarter were situated in Lusail (Fox Hills, Erkhyah and Marina District), The Pearl (Al Mutahidah towers and Abraj Bay Tower 2), Al Dafna, Luqta, Umm Ghuwailina and New Doha.
The median residential asking rent fell 5.1 percent over the past 12 months and 1.1 percent since the first quarter of 2021. Quoted median rents for apartments fell 1.2 percent (Quarter-on-Quarter) QoQ, while for villas asking rents slightly reduced by 0.5 percent QoQ. Despite a continued influx of supply in The Pearl and Lusail, these areas experienced a relatively softer annual decline in rents due to faster absorption compared to secondary locations.
“The bulk of the supply is coming in the form of apartments, while we see comparatively marginal increases in the number of villas. This might partially explain a new trend we have experienced since beginning of the pandemic last year, where declines in villa rents were less compared to apartments. Moreover, the average quarterly drops for apartment rentals widened over the last 12 months when compared to villas, as quarterly falls in median rent were easing,” said Anum Hasan, Market Research Manager for ValuStrat.
Office stock was estimated at 5.6 million sq m GLA with completion of 76,000 sq m GLA during Q2 2021. The citywide median asking rent for a typical office in the city stood at QR76 per sq m, declining 2.6 percent compared to Q1 2021 and 7.6 percent over a year. Take-up of office space has been estimated to be slow compared to the influx of supply, with oversupply estimated to exceed 2 million sq m GLA.
Due to restrictions on inbound tourism, international arrivals totalled 76,130 visitors during the first five months of 2021, less by 86 percent compared to the same period in 2020.
There was no addition of organised retail space during Q2 2021. The stock of shopping centres was approximately 1.93 million sq m GLA. Msheireb Galleria officially opened comprising Monoprix as an anchor and at least 30 pop-up stores. Leniency in restrictions and promotions offered at malls has been observed driving footfall during the quarter. However, regional/community malls and unorganised retail spaces recuperated at a slower rate compared to super-regional malls. The median monthly asking rent for shopping centres shrunk 2.3 percent compared to the first quarter of 2021. However, overall street retail rents fell 1.8 percent QoQ.
Mwani Qatar reported a surge of 22 percent YoY in Twenty-Foot Equivalent Units (TEUs) during H1 2021 in three ports: Hamad, Ruwais and Doha. Overall, average asking rents for dry/ambient warehouses was QR43 per sqm, increased 5 percent compared to Q1 2021 and 1 percent over one year.
