Doha, Qatar: Qatar’s newly built dynamic Lusail city is currently witnessing a rise in demand for office market this year, reports the commercial realty agency - Cushman and Wakefield.
According to the researchers at the consultancy, office vacancy rates are “considerably higher” across the older commercial districts around Doha. The report notes that older office buildings with limited features are positioned in a challenging atmosphere to attract new tenants, with most of the individuals opting for Lusail and West Bay.
It states that this could lead to the re-enhancing of renovation projects by building offices that align with modern energy efficiency and sustainability standards.
Top market experts noted that there is an indication of “upward pressure” on rents for selected buildings due to the shift in demand towards Grade A accommodation and reduced availability.
Meanwhile, the overall supply and vacancy remain solid, as analysts anticipate the gap to widen in rental values between prime and secondary stock in the years ahead.
The report states “Grade A stock is now typically available to lease for
between QR100 and QR130 per sqm per month, exclusive of service charges. Office spaces leased as ‘shell and core’ can be secured for QR50 to 60 per sqm per month in some of Doha’s office districts.
During the first three months of the year, the office rental activities declined after a robust surge in office tenants in Q4 2023, reports Cushman and Wakefield.
It says that “More than 70,000 sq m of Grade A office space has been leased or reserved by various government sectors over the past six months, which has reduced availability in the prime office locations of West Bay, Msheireb Downtown, and Lusail Marina.”
Market experts accentuate that most of the office space in Msheireb is rented or under offer, with restricted options.
“Government and private sector companies have been attracted by
the development’s LEED certification for sustainability as well as access to amenities on the doorstep,” it said.
Through the first quarter of 2024, numerous commercial lease transactions in Qatar’s financial district - West Bay have seen the amount of available space slip by nearly 8,000 sq m with just 13 percent of all office accommodation, which is currently open to rent.
With the increasing demand for the commercial market in Lusail, market leaders are expecting a number of firms to open their offices in Lusail over a period of time.
However, the report also notes that no vital additions were reported to the supply of office space in the country.
The experts estimate that the overall supply of “purpose-built” office accommodation is close to 5.4 million sq m. West Bay remains the largest concentration of supply with approx. 1.8 million sq m of gross leasable area, while Qatar’s Lusail City has over 850,000 sq m.
