The office space supply has increased significantly in the last quarter of 2021. With the entry of new companies in the local market, the demand for office space is expected to recover in the current year. Public sector entities, financial institutions and companies in oil and gas sector are driving the demand for new office spaces.
“Office supply in Qatar has increased significantly in recent months, with the opening of Qatar Energy’s new headquarters at Abdullah Bin Hamad Al Attiyah District and Lusail’s Commercial Boulevard adding more than 300,000 sq m of space between the two developments,” noted the Q4 Real Estate Market Review report released by Cushman & Wakefield.
The gross leasable area of office accommodation in Qatar has now reached approximately 5.3 million sqm. Cushman and Wakefield estimate that more than 1.4 million sq m of office space is currently available to lease.
This may increase once leases expire on buildings that we expect to be vacated due to government and hydrocarbon sector relocations.
In October, Qatar Chamber announced the acquisition of a building in Commercial Boulevard comprising 17,000 sq m of leasable area. There has also been an increase in demand from the financial services sector.
QFC reported an increase of 282 new firms to its platform in 2021 – an increase of 28 percent. As many as 65 office buildings across Doha are now QFC-designated locations. Qatar Free Zone Authority is also gaining traction in attracting international companies to Qatar, generating requirements for both office and light-industrial property. A total of 44 companies are now registered with QFZA, including Google, BM Cyber, D4A, Invent Solutions, Thales, and Macellan.
“Public sector bodies, financial institutions, and oil & gas sector companies continue to drive new demand for offices. The completion of office buildings in Energy City and Commercial Boulevard has resulted in leasable office supply in Lusail surpassing 800,000 sq m in Q4 (fourth quarter),” said the report. “We estimate that approximately 55 percent of this space is either occupied or reserved; however, a number of agreements are in place with public bodies and financial institutions, which will boost occupancy rates in Lusail in 2022,” it added.
Qatar’s economy is also expected to see strong recovery this year. Oxford Economics estimated GDP growth at 2.5 percent for 2021. Despite the detection of the Omicron variant in late December, and the re-introduction of some restrictions, GDP is expected to grow by 3.7 percent in 2022 - buoyed by increasing gas prices and ongoing activity ahead of the FIFA World Cup.
