File photo used for representation
Doha, Qatar: Outside of government demand, the majority of office activity in recent months has been concentrated on small units, which typically represent small companies and start-ups seeking premises to establish a commercial registration, Cushman & Wakefield noted in its fourth quarter (Q4) 2023 Real Estate Market Review noted.
There has been limited demand from private sector corporate occupiers – a sector which the office market in Doha will increasingly rely on for future take-up. The QFZA, QFC and Invest Qatar have all been taking strides to boost private sector demand and encourage inward investment; however, traction is more likely to be evident in the medium term rather than the short term.
Office demand has been largely concentrated in prime districts, where new supply has increased. With little demand for older office space, an increasing number of buildings are being considered for refurbishment or redevelopment. The report noted “We expect GSAS ratings to play an important role in any major office lettings in Qatar in the coming years. Ultimately, it may be the shortage of high-specification energy efficient buildings that drives new office construction, despite the availability of older office space,” the report said.
The current oversupply of office space in Qatar will continue to be a drag on office rent.
The supply of purpose-built office accommodation in Qatar has reached approximately 5.4 million sqm in 2024 with an estimated 1.3 – 1.4 million sqm of vacant space available. Office rents have remained relatively flat over the past 12 months.
Grade A stock is now typically available to lease for between QR100 and QR120 per sqm per month, exclusive of service charges. Shell and core office space can be leased from QR65 per sqm in areas such as Lusail and West Bay, while this type of accommodation is available for QR50 – 60 per sqm per month in some of Doha’s older office districts.
“We understand that in excess of 70,000 sqm of office space across West Bay and Msheireb has either been leased or is under offer to various government entities. These transactions will see the availability of vacant office space in West Bay reduce to approximately 15 percent, while overall availability in the prime office districts of Msheireb, Lusail and West Bay is approximately 21 percent,” the report stated.
The fall in availability in recent years is reflective of a number of large-scale leases by government entities or the Oil and Gas sector. This includes the vast Abdullah Bin Hamad Al Attiyah District, which is occupied in its entirety by Qatar Energy.
“The areas experiencing the highest vacancy are Al Wessil (Energy City) and Lusail Downtown; however, this is largely due to the number of new buildings. We expect occupancy to increase as these districts mature,” it added.
