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7 Al Waab City 8 Doha International Airport
Apartment sales continued to show a discrepancy between the primary and secondary markets, highlighting an increase in the number of existing owners wishing to liquidate their investments while still at break-even point
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RESIDENTIAL ACTIVITY
According to a Q4 2009 report by Asteco, Qatar’s residential rental market remained flat over the last three months of 2009 but witnessed a marginal increase in interest from tenants assessing the market towards the end of the quarter. In Doha’s less-established areas, monthly rental levels were
QR3,500 to QR4,000 (US$961 to US$1099) for one-bedroom apartments, QR5,000 to QR7,000 (US$1,374 to US$1,923) for two bedrooms and QR6,000 to QR8,000 (US$1,648 to US$2,198) for three bedrooms. Meanwhile, apartments in the prime areas of West Bay and
Lagoon Plaza ranged from QR7,500 to QR12,000 (US$2,060 to US$3,297) for one-bedroom, QR11,000 to QR18,000 (US$3,022 to US$4,945) for two bedrooms, and QR15,000 to QR20,000 (US$4,121 to US$5,494) for three bedrooms. Asteco continues: ‘The more mature villa market in this area continued to outperform the less established apartment market, with three-bedroom villas achieving 10 to 20 percent higher rental levels than three-bedroom apartments. Indeed, villa vacancy rates in this area are currently estimated at 4.5 percent. ‘Meanwhile, apartment sales continued to show a discrepancy
between the primary and the secondary markets, highlighting an increase in the number of existing owners wishing to liquidate their investments while still at a break-even point.’ The report states that secondary sellers have a competitive advantage over developers who are locked into high construction costs where contracts were agreed at the peak of the market. Asteco’s research shows a current discount on secondary stock of around 25 percent, which broadly reflects early 2008 pricing. ‘There has been limited activity in the off-plan sales market
in the freehold and long leasehold zones, which are available to expatriates, and marginal activity within the greater Doha market, available to local and GCC nationals,’ the report adds. Residential supply will be further augmented by 1,200
apartments on The Pearl-Qatar which are due for delivery in the first quarter of 2010. Another recent development is the removal of the cap on
residential rents. A new law ends the two-year freeze which was set in 2008 during spiralling inflation. However, the rental cap for commercial properties will remain in place for another year. In addition, new legislation has been drafted to regulate unlicensed property brokers and companies. The regulations will include the launch of a registered real estate association. If the law is adopted, only companies owned by Qataris will be permitted a license to operate real estate agencies. While expats may still operate as independent property brokers, they will need to be under the sponsorship of a national-owned agency.
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MALL DOMINANCE
Like many destinations in the GCC, Doha’s retail market is dominated by large-scale malls. The Cushman & Wakefield report adds: ‘[Qatar’s retail market] has grown significantly in recent years and so far remained resilient, with high rents maintained by robust demand for limited product. Qatar however is now entering a new phase, with a significant number of large-scale projects scheduled to open in the next few years.’ It continues: ‘Villagio Mall is considered by many to be Doha’s prime centre, and has recently been extended to add a 13-screen cinema and a luxury retail section, Via Domo. However its leisure credentials remain limited in comparison to the mega malls of neighbouring Bahrain and Dubai. The dated Landmark Mall and City Centre are the only other notable shopping destinations in Doha, however both are expected to suffer as retailers and consumers are drawn to the new high quality malls scheduled to open in the next few years. City Centre is responding to the threat by incorporating five new luxury hotels within the mall, which will provide 1,300 keys.’ The report comments that new retail units in Qatar’s malls command rents of up to QAR 225 (US$62) per square
metre per month, with the highest rents achieved in Villaggio, Landmark and City Centre. It states that existing malls are experiencing few transactions due to the upcoming supply and low vacancy rates, sometimes as little as one percent. In a few cases, surrender premiums have been paid to encourage existing retailers to hand back units. Qatar’s growing labour force has expanded the mid and low market and retailers are capitalising on this opportunity with a variety of fringe malls due to open. Porto Arabia, the first phase of the retail component of The Pearl-Qatar, was launched at the end 2008, and a
number of high-end retail and dining outlets are now open. Porto Arabia is expected to be fully operational by the end of this year, with a second phase to follow in 2011. This years’ other significant openings include Lagoona Mall (53,000 square metres), located beneath the Zig-Zag towers in West Bay and The Gate (24,000 square metres). A number of other key retail projects are due to follow in the medium term, including the Heart of Doha, Al Wa’ab City Mall and Entertainment City at Lusail.
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/apr-may 2010
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