File picture used for representation.
Doha, Qatar: The opening of new offices in Lusail, The Pearl and Msheireb Downtown has seen an increase in the second quarter (Q2) of this year as office expansion plays a vital role.
“The second quarter saw the official launch of new offices for VISA in West Bay and the expansion of Boston Consulting Group’s presence in Tower 121 at The Pearl Island.”
“The most significant announcement in recent months has been the confirmation that TotalEnergies will move to Msheireb Downtown, joining Microsoft and Google Cloud in the new mixed-use district. TotalEnergies will occupy approximately 4,500 sqm of gross leasable area,” Cushman & Wakefield said in its Q2 2023 Real Estate Market Review.
The real estate consultancy firm noted, over the past two years, office activity has been dominated by the oil and gas sector and the government sector, with relocations to Lusail featuring heavily in new deals. As Qatar emerges from a period of activity fueled by the hosting of the World Cup, the diversification of the economy and non hydrocarbon economic growth will be vital to creating new demand for office space in Qatar.
The report stated, “The most recent addition to the office market is the iconic mixed use Burj Al Mana on West Bay’s Corniche. Eleven office floors in the 56-storey building have increased supply in Qatar’s largest office district to approximately 1.85 million sqm. While higher specification offices in Doha have secured high occupancy, much of the vacant office space is of basic quality with limited tenant demand.”
It further said, “Supply of stock in prime office districts increased by approximately 75,000 square meters in the first half of 2023 to reach 2.98 million square meters. The increase in supply has averaged 160,000 sq m per annum in the preceding five years.”
Net office take up has averaged 110,000 sqm/annum over the last 10 years. For the last five years take up in Lusail has accounted
for 90,000 sqm per annum.
Increasingly attractive lease terms are available for shell-and-core space, where tenants are responsible for the internal fit-outs; however, there is little appetite for this accommodation at present as tenants look to avoid the capex required for expensive internal fit-outs.
Grade A stock is now typically available to lease for between QR100 and QR120 per sqm per month, exclusive of service charges.
Office spaces leased as ‘shell and core’ can be secured for QR55 – 60 per sq m per month in some of Doha’s main office districts, the report added.
The supply of purpose built office accommodation in Qatar has now surpassed 5.3 million sqm, with an estimated 1.3 – 1.5 million sqm of vacant space available.
