File picture of bridge linking Al Riffa to Mall of Qatar. Abdul Basit / The Peninsula
Doha: Major malls such as Villaggio, City Center, and Mall of Qatar are expected to receive a boost in footfall this year due to their proximity to the newly opened Doha Metro stations, although the degree of integration with the stations will become crucial in the hotter summer months, global real estate consultant Cushman & Wakefield has said in its latest Qatar real estate market review.
It added that the opening of the metro is also expected to provide a boost for street fronting retail in the Msheireb downtown district, which has seen a large increase in footfall in December. The development of a number of ‘outdoor’ shopping destinations has also increased the national retail footprint, with four of the most prominent locations; Porto Arabia, Medina Centrale, Katara, and Souq Waqif now providing more than 230,000sqm of retail and restaurant space.
However, the report added that there has been a shift in the dynamics of the retail market in Doha in 2019. Renovation works and major infrastructure projects have had a detrimental short-term impact on the footfall of a number of established retail destinations, while new developments with new retail offerings, convenient access and parking and prominent leisure provisions have performed well.
Overall retail sales in Qatar grew by 10 percent in 2019, according to Oxford Economics. This was down from the 18 percent growth recorded in 2018, which reflected a strong rebound from the relatively low numbers registered in 2017. Despite positive retail sales numbers, the substantial annual increase in retail floor area since 2015 has resulted in an increasingly challenging market for retailers, Cushman & Wakefield added.
The supply of leasable accommodation in organised retail malls (of over 10,000sqm) increased by 120 percent to 1.4 million sqm between 2015 and 2020. The local retail market is dominated to a large degree by small number of retail groups, who each hold the franchise rights to multiple international retail brands. After a period of expansion, many retail operators entered a period of consolidation in 2019, which translated to a reduction in tenant demand. The increasing gap between supply and demand has resulted in a fall in retail rental values in many developments throughout Qatar.
While occupancy rates in prime showroom locations such as Salwa Road remain high, accommodation is now being leased at between QR100 and QR120 per sqm per month, although premium car showrooms can still command rents between QR130 and QR150, depending on the unit size.
