A view of Lusail City.
Doha: There has been an increase in companies looking to secure new office accommodation in Qatar in recent months. The majority of new demand is focused on Lusail’s Marina District and more companies are being attracted to Lusail according to a report by Cushman and Wakefield Qatar (CWQ).
The global real estate advisory firm said: “The majority of new demand is focused on Lusail’s Marina District. Companies 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.”
Cushman & Wakefield has seen an increase in companies looking to secure new office accommodation in recent months; however, this has been largely driven by lease expiries from companies within Qatar. “New leasing activity in the commercial office sector has remained slow in second quarter of 2021, with many corporate occupiers taking their time in committing to new leases. One of the most notable tenancies in recent months saw Lusail University acquire an entire building in Lusail’s Energy City,” it noted.
New office supply continues to reach the market in Qatar, most notably in Lusail, where supply has now surpassed 600,000sqm. Overall office supply in Qatar will shortly surpass 5 million sqm.
The increasing supply of office accommodation, and relatively slow take-up from new tenants, has seen a reduction in overall occupancy levels, said the report. Cushman and Wakefield estimates that approximately 20 to 25 percent of supply in West Bay and Lusail is now available to lease.
The report pointed that office rents have fallen significantly since 2015, after a fall in oil prices saw a dramatic reduction in new demand from government entities and the oil and gas sector. Prime office rents in West Bay now range between QR100 and QR130 per sqm per month exclusive of service charges. Office spaces fitted to ‘shell and core’ command significantly lower rates as tenants look to avoid the significant capital expenditure involved with office fit-outs.
“Office suites in Lusail usually command rents of between QR80 and QR120; however, we expect rents to match those in West Bay as soon as occupancy rates increase in the area. Office rents in Old Salata, Al Sadd and C-Ring Road are typically between QR60 and QR80 per sqm per month, with rent free incentives also available to attract new tenants,” it added.
The COVID-19 and the reduction in international travel continue to influence the pace at which international companies’ secure new office space. Cushman & Wakefield’s global clients are increasingly of the view that most employees will return to the office over the coming months, but new acquisition strategies continue to be put on hold in many cases.
