(MENAFN- The Peninsula) By Lani Rose R Dizon I The Peninsula
The supply and demand in Qatar's real estate sector will see a rebalancing next year, with rental levels and capital values stabilising within Doha as both horizons converge towards equilibrium, leading real estate consultant Cushman & Wakefield Qatar has said.
The next few years look to be the most exciting yet for the country's real estate sector, said Edd Brookes, General Manager of Cushman & Wakefield Qatar as he announced the company's rebranding yesterday.
'In infrastructure, how are the opening of the remaining metro links going to effect the micro real estate market here in Doha; and what will the impact of Qatar's ambitions to host over 5.6 million tourists by 2023 have on the retail market, said Brookes.
He added that other factors contributing to the real estate market activity includes the government policy which is committed to expanding the non-hydrocarbon sector, expansion of QFC compliant activities, and a focused roadshow of the Qatar Free Zone Authority to compete for regional and international occupiers.
'In regulations, with the anticipated adoption of Royal Institution of Chartered Surveyors (RICS) standards and a far more regulated brokerage market, this can only be a positive step for fully compliant companies such as Cushman & Wakefield Qatar, he added.
Following more than three years of decline, apartment rents have already started leveling off in the second quarter of this year. However, the large pipeline of new supply in the residential market means residents are unlikely to see a return to rental growth in the near future, Cushman & Wakefield Qatar has previously said in its Qatar market report.
The greater affordability of apartments has seen an increase in people relocating to higher quality and better located apartments. Demand is expected to become more focused on areas such as The Pearl Qatar and Lusail as new supply arrives to the market at affordable rental levels.
Rents have also stabilised for villa compounds throughout Doha after a period of decline between 2016 and 2018. Occupancy rates for prime, well located compounds have increased due to a flight to quality by tenants. A few select compounds have waiting lists in place again, the report noted.
High land prices over recent years has resulted in fewer low-density villa compounds being built. Pipeline supply of compound villas is significantly lower than that of apartments, which may result in rental increases if demand for these rises.
As for the office market, the company estimates that the current overall supply of purpose built office accommodation in Doha is now in the region of 4.7 million sq m. The increasing vacancy rates in Doha have seen rents continue to decrease in 2019. CAT A standard offices in West Bay are now available for between QR110 and QR140 per sqm per month. Discounted rents can also be secured on shell and core office space; however demand for shell and core offices is extremely limited as budget sensitive tenants prefer to avoid the capital contributions required for office fit-outs.
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