Doha: Qatar’s retail sector is booming and witnessing significant growth. The total supply of organised retail accommodation within malls in Qatar has reached 1.7 million square metres (sqm) which shows an increase of more than 160 percent since 2015, noted a recent report released by Cushman and Wakefield.
The most notable development in the retail real estate market in Qatar in the second quarter (Q2) of this year was the opening of Place Vendome in Lusail in April. “With a reported GLA of 230,000 sqm, Place Vendome represents the third Super-Regional mall in Qatar after Mall of Qatar and Doha Festival City and is the first major mall (50,000 sqm + GLA) to open in Qatar since Tawar Mall in 2018,” the report said.
It added: “Overall supply of organised retail accommodation within malls in Qatar has now reached 1.7 million sqm. This supply excludes hypermarkets and supermarkets with ancillary convenience stores. New supply reflects an increase of more than 160 percent since 2015, and has created an oversupply, which has become increasingly evident since 2018”.
Occupancy rates in the 19 largest malls in Qatar has dropped to approximately 80 percent. A two-tiered market has emerged whereby a selection of malls attract high footfall and are maintaining rental levels and occupancy, with other malls struggling to attract the same level of tenants and shoppers.
Despite increasing pressure on occupancy rates, new developments have significantly increased the quality of retail real estate on offer in Qatar, with new malls focusing on higher quality restaurants, entertainment, and leisure to complement their retail offering.
The Q2 Real Estate Market Review report noted that generous rent free incentives, fit-out contributions and turnover rent arrangements are on offer in many developments to attract tenants and build occupancy. Some of the busier malls have phased out rental incentives as footfall and retail spending recovers after the lifting of most COVID-19 related restrictions.
"New retail/F&B supply expected to open in Qatar in 2022 includes Doha Oasis (Printemps), Giardino Mall, 04 Mall, Waddan Mall, Commercial Boulevard and the MENA District in Doha Port,” it added.
Headline rents for line units in Doha’s busier malls are typically between QR200 and QR250 per sqm per month. Rental incentives have been phased out to a large degree in Doha’s busier malls; however, significant discounts and turnover rents are still available in malls with higher vacancy as landlords look to increase occupancy.
Outside of the main retail malls, high street showrooms, local convenience retail, and F&B destinations are typically available to lease for between QR90 and QR150 per sqm per month, the report said.
