Qatar house rents on the rise despite slump

Doha / EMIRATES BUSINESS

Despite reports of market gloom, Qatar’s residential rental levels continued to expand unabated during 2015, rising by approximately 7 percent year-on-year during the second half of 2015. But this was down from 14 percent annual growth achieved during the same period in 2014.
Smaller apartment units, particularly those within central locations, remained in high demand, although rental growth was actually most evident for secondary and more affordable locations, global real estate consultancy firm CBRE said.
“There has been increasing evidence of tenant relocations and downsizing, with some occupiers moving into smaller units or choosing more affordable accommodation in less prominent areas of the city,” said Mat Green, Head of Research & Consulting UAE, CBRE Middle East.
Housing options in locations such as Al Sadd, West Bay Lagoon and the Pearl-Qatar continue to attract solid demand from high income expat groups.
Typical monthly rents for one bedroom and two bedroom apartments in Al Sadd range from QR8,000-14,000 per month, while West Bay Lagoon and Pearl Qatar range from QR14,000 to QR20,000 per month.
From a total housing stock of roughly 180,000 units during 2010, Doha’s total housing stock has grown to reach in excess of 226,500 units at the end of 2015, translating into a circa 5 percent annual growth rate.
The CBRE’s Qatar MarketView highlights that a significant majority (80 percent) of future supply will cater to upper mid – high income segments, with estimated rental levels in excess of QR7,500 per month, meaning a minimum household monthly income of around QR25,000 per month would be required.
When looking at Qatar’s office market, the CBRE report shows that the West Bay/Diplomatic area remains the primary choice for the majority of international and local office occupiers wishing to set up operations in the country.
In addition to comprising roughly 60pc of the total office stock, proximity to important facilities make the wider West Bay area more appealing to tenants.
West Bay will remain at the epicentre of the commercial office market in the short to medium term at least.
“In terms of the future office supply pipeline, over 32 percent of all office space set to be completed over the next five years will be completed in the Lusail area, versus around 29 percent in West Bay,” said Green.
Prime rentals for Grade A office space remained steady during the second half of the year, with rates typically ranging from QR220-280/m2/month.
In addition to the headline costs, the majority of commercial occupiers will also pay a service charge, which generally ranges between 10-25 percent of the annual base rentals.