(MENAFN- The Peninsula) Deepak John |
The Peninsula
Qatar's residential sector witnessed a strong bounce back in the first two quarters (Q1 and Q2) of this year as there has been significant rise in tenant movement during this period. The positive momentum in the second half of 2022 is expected to continue driven by the upcoming FIFA World Cup Qatar,” according to KPMG Real Estate Index report.
Despite the on-going COVID-19 pandemic situation, the residential sector has outperformed when compared to the corresponding period of fourth quarter (Q4) of 2021.“Q1 and Q2, 2022 exhibited strong leasing activity resulting in a significant growth of 27.2 percent on the rental index as compared to 1.5 percent growth as witnessed during the third and fourth quarter (Q3 and Q4) of 2021. The same period (Q1 and Q2) during 2021 had experienced a decline by approximately 0.4 percent.
The Q1 and Q2 edition of the report noted that there has been a significant rise in tenant movement over the last two quarters of 2022. Interestingly, subsequent past two quarter experienced signs of recovery on the rental index.“This spike is primarily driven by World Cup demand, increasing demand for larger living spaces due to rise of WFH (Work from home) culture, convenient access to recreational amenities, and private outdoor spaces. As per our research, centrally-located districts continue to be popular with tenant's keen on upscale properties.”
The organised retail mall rental index experienced no further drop over Q1 and Q2 2022, compared to last two quarters of 2021. Changing the momentum experienced over the last year, Q1 and Q2 2022 registered improved leasing activity with several new and existing brands occupying organised retail spaces in the leading malls across Qatar.
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The rentals remain in favour of the retailers, as major developers/mall operators continue to offer incentives to attract and retain tenants such as rent-free periods and extended fit-out periods, the report stated.
“As per our interactions with the leading retailers and mall operators, the retail segment in Qatar is experiencing the advent of new operational models such as Revenue share deals, which offer a combination of base rent and turnover percentage to ease the rental burden on retailers. This is also beneficial in attracting new tenants, as we foresee more retailers opting for this route over the short to mid-term,” said the report.
It added that the decline in the rental index is primarily due to the correction in rentals for the Central Business District units, which witnessed drop in rentals by 1.0 percent over the first two quarters of 2022. While the Secondary Business District properties continue to maintain momentum witnessed over Q4 2021.
“As more office developments reach completion especially in areas such as Lusail and West Bay, we expect this index trend to continue over the short to middle term. However, government initiatives to expand the private sector and introduction of the 100 percent foreign ownership law could help mitigate this slowdown over the long run,” the report stated.
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