'Prime Office Rents Will Need To Increase From Current Levels' As Economy Poised To Expand Fast: CWQ

(MENAFN- Gulf Times) Prime office rents will need to increase from the current levels with economy poised to expand fast, which also exerts pressure to grow for new office development in prime areas, according to Cushman and Wakefield Qatar (CWQ).
"As the economy grows, we expect the case for new office development in prime locations to emerge," CWQ said in its latest report, adding to justify new development, prime office rents will need to increase from current levels.
Quoting the latest GDP (gross domestic product) data, CWQ said it confirms that the Qatari economy picked up at the end of last year as GDP grew by 6.3% year-on-year in the fourth quarter of 2024, owing to a supportive base and implying 2.6% expansion last year, above a 1.9% projection.
Ahead of the escalation in tariffs introduced by the US administration in April, Oxford Economics had raised its 2025 GDP growth forecast for Qatar to 2.6% and further to 5% in 2026. The upgrade to their near-term outlook reflected "better-than-expected" growth at the end of 2024 and positive activity indicators at the start of this year.
The report highlighted that after several years of oversupply, the pipeline of new office development in Doha is“minimal”.
While the availability of prime office space has reduced, this has yet to be reflected in rental growth across the board, it said, adding Prime CAT A office space typically commands rents between QR100 and QR140 per sq m per month, with larger floorplates of more than 1,000 sqm usually available for less than QR100 per sq m per month.
Supply of modern office buildings in Lusail, West Bay, The Pearl Island and Msheireb Downtown has reached 3mn sq m; representing approximately 55% of all purpose-built office supply in Doha.
The recent increase in the take-up of offices in prime areas has seen Grade A office availability fall to 10%, it said, adding overall availability in the office sector is estimated to be closer to 20%.
Outside of West Bay, Lusail and Msheireb Downtown, the office market is relatively subdued, which is reflected in the lack of take-up and the quoted rents for available space.
Office space in secondary locations can be secured for as little as QR50-60 per sq m per month, reflecting the high vacancies and low demand in some of these areas. In many older buildings, rents are inclusive of service charge contributions.
Recent activity remains dominated by government bodies acquiring office space in Lusail and West Bay, with more than 150,000 sq m being leased in the past eighteen months.
To reduce reliance on the public sector for office demand, Qatar has been promoting the growth of private sector through various initiatives.
The Web Summit successfully inaugurated its Qatar edition in 2024 and held its second conference in February of this year. The first two Web Summit events have reportedly seen several companies, particularly those in e- commerce, payment solutions, and digital marketing, laying the groundwork for setting up in Qatar.
In February 2025, HSBC joined a growing list of companies that announced relocating to MDD or Msheireb Downtown. The bank, which is moving headquarters to MDD, will occupy about 3,000 sq m.

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