Doha, Qatar 7, December 2022: Apartment rents in Doha have experienced a 22% jump according to global property consultancy Knight Frank’s bi-annual Qatar Real Estate Market Review.
Faisal Durrani, Partner – Head of Middle East Research explained: “The prime residential leasing market for apartments for instance has seen monthly rents grow by 22% over the last 12 months to an average of about QAR 13,100, with three-bedroom apartments at The Pearl commanding the highest lease rates. We feel this is mainly linked to the influx of new expatriate employees as Covid-restrictions abate, but also landlords hoping to capitalise on any shortage in hotel rooms”.
In the sales market, Knight Frank reports that transactional volumes have slipped by 40% over the last 12-months and attributes this to sharp price increases.
Adam Stewart, Partner – Head of Qatar office added: “There is a strong air of confidence prevailing in Qatar at the moment. Many sellers have been pushing up asking residential prices for several months, but we may have crossed a price threshold that is considered both sensible and achievable. Clearly there are other factors at play too, such as rising interest and mortgage rates, which are dampening demand as well.”
Prime values for apartments have breached QAR 14,000 psm, while villas cost a little over QAR 7,100 psm, an increase of 3% on this time last year, according to Knight Frank’s analysis.
In the office market, average Grade A rents have fallen by 6% between Q3 2021 and Q3 2022.
Stewart continued: “The office market is going through a significant shift, with demand being effectively moved away from West Bay to Lusail as authorities push for public-sector linked entities to relocate to the latter. Average lease rates in Lusail – c. QAR 90 psm – are cheaper than West Bay, which adds to the appeal. What this means however is West Bay is inevitably likely to experience downward pressure on rents”.
Knight Frank says, new occupiers continue to arrive, especially at Qatar’s two freezones - Ras Bufontas and Umm Al Houl – with Google, BM Cyber, Invent Solutions, Thales, and Macallan among the latest to lease offices.
Elsewhere, in the retail market, annual lease rates are holding steady at an average of QAR 224 psm.
Retailers have also begun to broaden their offerings by including additional F&B, leisure, and lifestyle components into their projects to mitigate the effects of the ever-expanding e-commerce sector and increase consumer focus on experiential retail.
“The retail scene is getting increasingly competitive. As e-commerce penetration expands and consumer behaviour and expectations evolve, traditional shops face challenging market conditions. As a result, retailers are extending their online presence to sustain and grow their customer base”, concluded Durrani.