DROP IN OFFICE RENTS TO BENEFIT TENANTS: DTZ
15 > QATAR TODAY > SEPTEMBER 2016
Real estate company DTZ released its 2016 Qatar market report for the second quarter last month, which showed a 1015% reduction in Grade A office rents since the start of the year.
Vacancy rates of Grade A office accommodations in West Bay have increased by approximately 5% over the last six months resulting in opportunities for tenants to negotiate advantageous terms. While the population of Qatar increased by approximately 9% over the past 12 months, the vast majority of new arrivals has been made up of construction workers. While this has kept the tertiary sector buoyant, demand for prime and mid-range residential accommodation has fallen due to a significant exodus of white-collar workers following recent redundancy programmes in the government and hydrocarbon sectors.
"The current rental softening reflects market-driven supply and demand and provides some relief to occupiers from rents which have been rising year on year since 2010," said Mark Proudley, Director, Head of Commercial Agency, Consulting and Research, DTZ. He added: "The long-term trajectory for Qatar remains good with the government's significant infrastructure investment, valued at QR261 billion, providing welcome and fundamental support to the wider real estate economy."
Global Real Estate Company, owned by Sheikh Ahmed bin Mohammed bin Saud Al Abdurrahman Al Thani, and Qatar's Quality Group International last month signed a deal to launch a new 14,864 sq. m shopping centre in Wakrah City. Apart from a supermarket and department store, the mall, which is expected to be completed by mid-2017, will also have other facilities such as a pharmacy, laundry and money exchange. "The mall project in Wakrah has undertaken extensive market research to better understand the needs and preferences of customers, so we have taken a strategic approach to hand over the project to a leading retailer in Qatar," said Sheikh Ahmed. “We hope that Quality Group can provide the best shopping and leisure experience to the multicommunity in Qatar, especially in Wakrah and Wukair areas, and we are delighted to be signing this new collaboration," he added.