Lusail Marina District has overtaken West Bay as the location of choice for most companies seeking new office space.
Occupiers are being attracted to Lusail by the improved access, infrastructure provisions, car parking availability, rental prices, and the number of government entities locating in the area, according to real estate consultant, Cushman and Wakefield Qatar (CWQ).
Grade A office supply in Lusail has now surpassed 600,000 sqm with Hermas Business Park the latest significant development on offer to the market, according to the report. Occupancy rates are currently relatively low due the sharp rise in new supply; however, CWQ’s first-quarter report about Qatar’s real estate sector expects a trend in occupiers moving to Lusail in the coming years as the area matures.
“While the IT sector is considering reducing its footprint, many sectors intend to maintain their need for physical office space while offering staff more flexible ‘work from home’ solutions when required. New demand from international occupiers remains low, with relocations within Qatar dominating leasing activity over the past year. The establishment of the Qatar Free Zone Authority (QFZA) will play an essential role in attracting inward investment and creating demand for office space as we move beyond the pandemic,” noted the report.
QFZA is an independent authority created in 2018 to oversee and regulate the world-class free zones in Qatar, offering outstanding opportunities and benefits for businesses seeking to expand their global operations. The authority oversees two free zones in Qatar; Ras Boufantas and Umm AlHoul and offers outstanding opportunities and benefits for businesses seeking to expand globally. The increase in office supply and relative slowdown in demand has resulted in rents falling by between 40 percent and 50 percent since 2015, when available space was at a premium. Offices in West Bay are now available to lease for between QR100 and QR140 per sqm per month exclusive of service charges.
Office suites in Lusail are typically available at lower rents than their equivalent in West Bay, although as absorption in Lusail increases, we expect this gap to close, said the report. Office space in locations such as Old Salata, Al Sadd and C-Ring Road is now typically available to lease for between QR60 and QR80 per sq m per month. There is currently very little demand for ‘shell-and-core’ space as tenants look to avoid the capital expenditure required for an office fit-out.
In the retail market, following the lifting of most COVIDrelated restrictions in Q4, the retail sector performed relatively well in Doha in the early months of 2021. While footfall increased in Qatar’s retail malls in the first quarter, uncertainty about the duration of lockdown measures from country to country and the accelerating global trend towards online shopping means that many international retail chains have put real-estate acquisition plans on hold over the past 12 months, according to the report.
“The overall supply in Doha’s 20 largest organised retail malls now totals over 1.3 million sqm following the recent opening of the Galleria at Msheireb. The total leasable area of organised retail accommodation throughout Qatar, including neighbourhood malls, has now surpassed 1.5 million sqm. In addition to organised retail malls, outdoor destinations including Souq Waqif, Katara Cultural Village, Medina Centrale, and La Croisette provide more than 230,000 sqm of leasable space,” said the report.
It noted, rents for ‘in-line’ retail stores in Doha’s main organised malls typically range from QR200 to QR320 per sqm month. Lower rents are available to anchor stores and larger outlets. While headline rents have not significantly decreased in many of the main malls throughout, many retailers have been offered temporary discounts or rent holidays during the past year to cushion the impact of the pandemic.
Outside of the main malls, high street and local convenience retail units are typically available for between QR100 and QR180 per sqm, depending on the size of unit and the level of footfall.
Premiums typically apply for units with licences to sell food and beverages.
Al Furjan markets are a government-led initiative to provide local retail conveniences within residential communities. These units are available at discounted monthly rents to small independent businesses.
