A general view of the fiancial district in Lusail, Qatar.
Doha, Qatar: Qatar’s office market is expected to see a boost in 2024 and beyond, with GSAS ratings contributing a pivotal part, cites reports.
According to the analysts at Cushman & Wakefield, this could be due to the shortage of high-specification energy-efficient buildings that drive new office construction, despite the availability of older office space.
However, in its quarterly report, the researchers state that the current oversupply of office space in Qatar is anticipated to be “a drag” on office rents from 2024.
Analysing the third quarter of 2023, it said: “The supply of purpose-built office accommodation in Qatar has now surpassed 5.3 million sq m., with an estimated 1.3–1.5 million sq m of vacant space available.”
The report commented that Grade A stock is at present typically available to lease between QR100 and QR120 per sqm per month, exclusive of service charges.
On the other hand, Shell and core office space can be rented from QR65 per sq m in Qatar’s financial districts like Lusail and West Bay, while this type of accommodation is available for QR50 to QR60 per sq m per month in some of Doha’s older office districts.
“Leasing activity was quiet in the commercial office sector during the summer months, with overall take-up for the year lagging behind 2022,” highlighted Cushman & Wakefield.
The experts, however, believe that activity in the short term is to be dominated by the public sector, with several proposals for Grade A space, which is at the moment under discussion.
The report noted that entities including QFZA, QFC, and Invest Qatar have all been taking strides to boost private sector demand and encourage inward investment, but significant new office demand from the private sector is only likely to become evident in the medium term.
The report also mentions that the availability of office accommodation and the relatively slow take-up have resulted in a decline in construction activity in the commercial office sector this year.
Researchers expect that this trend will persist until a considerable portion of existing prime office accommodation is absorbed.
The report also outlined the Corporations’ responsibility towards climate change and sustainability is increasingly evident in 2023, with international occupiers demanding accommodation that meets minimum sustainability targets.
“The number of options available to global corporations in Qatar is reducing, as many will not consider occupying older buildings that don’t meet energy efficiency standards, it added.
Having lesser demand for older office space, retrofitting has become a topical issue among developers and landlords in Qatar.
