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Qatar Real Estate Report Q1 2011
Business Monitor International, Dec 2010, Pages: 57
Qatar Real Estate Report provides industry professionals and strategists, corporate analysts, real estate associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Qatar's Real Estate industry.
Key Insights On The Real Estate Sector Of Qatar
One of the world’s richest and most rapidly growing countries, Qatar is home to a dynamic commercial real estate sector that should be enjoying a boom. The outlook is positive; commercial real estate should grow as natural gas exports flourish and as the government encourages economic diversification. Qatar is also small enough that it should be easy for policymakers to control the supply of new (and often prestigious) developments.
With no other real competitor to the position of the fastest growing economy in the world this year, we have no reason not to be impressed by Qatar's immense potential, openness drive and rapidly developing infrastructure. Nevertheless, conditions in the real estate sector have been mixed. Rental rates dropped 10% in the office and retail sub-sectors of Al-Khor in 2009, but 20-35% in the city’s industrial sub-sector and in all three sub-sectors of Al-Wakra and Doha. The main effect of the global financial crisis was to expose a massive – if temporary – oversupply of commercial real estate.
Qatar’s landlords did not cope equally well with the dislocations of 2009. In Doha, the retail sub-sector of Al-Khor and the office and retail sub-sectors of Al-Wakra, rental yields generally fell (or moved sideways) as landlords held on to their investments. By contrast, yields soared in the office sub-sector of Al-Khor and the industrial sub-sectors of Al-Khor and Al-Wakra. The implication is that prices and capital values slumped as particular protagonists were forced to sell at very low prices.
When we interviewed them in early 2010, our in-country sources indicated that they expected conditions would improve fairly quickly. The details that our sources provided to us when we interviewed them again in mid-2010 vindicated their earlier confidence. Rents have been rising across the board since the beginning of the year and are expected to continue to do so.
Looking forward, we envisage that rental yields will converge. In practice, this means that they should fall in the industrial sub-sectors of Al-Khor and Al-Wakra, but move sideways or rise elsewhere.
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