Qatar - A Rapidly Rising Real Estate Industry

From top: Qatar University, Museum of Islamic Art, Doha Skyline, Souq Waqif, The Pearl

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

Construction along the Doha Corniche.

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 , 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 University

Qatar’s landlords did not cope equally well with the dislocations. 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.

View of the Aspire Dome

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.

Doha's skyline seen from the south side of Doha Bay, with the Museum of Islamic Art in the foreground.

Doha Marina

The Business and Investment in Qatar Forum, was held  this year in new York, in the United State of America from 6 to 7 April 2011, under the patronage and in presence of H.E sheikh Hamad Bin Jassim Al Thani, Prime Minister and Minister of Foreign Affairs of the state of Qatar.

This forum was organized, by the permanent committee for organizing conference, and Qatari Businessmen Association as the main organizing partner, in cooperation with Ministry of business and trade, Qatar chamber of commerce, Ministry of energy and industry, Qatari businesswomen association, National U.S-Arab Chamber of Commerce, U.S-Qatar Business council, Bilateral US-Arab Chamber of Commerce.

Source: Qatar Statistics Authority (QSA)

The forum achieved an outstanding success in the business capital of America New York City. Were it attracted more than 1000 businessmen and representatives from big and medium American companies, which reflect the importance of the Qatari market to the American business community, and the importance of Qatar as a center for investment in the region.

Another field was Highlighted by H.E the prime minister and minister of foreign affairs Sheikh Hamad Bin Jassim Al-Thani which is the financial sector saying "it enjoys stability and being able to achieve higher growth as it was not affected except in a limited way due to the international financial crisis implications because of the following reticent banking policy. In spite of that, Qatar has implemented three programmes as a proactive step to support the banking sector and one of them is supporting a capital base for the Qatari banks"

Doha Skyline at night

Amid economic slowdown, Qatar's real estate market is expected to continue its strong position regionally. Citing opportunity cost as a key decision-maker for property investors in the region, Qatar will continue to provide good quality investment opportunities in the medium to long term due to its strong market fundamentals.

A growing economy and population built on the back of the country's expanding oil and gas projects means demand will continue to remain positive.

Interest from both GCC and expatriate investors continues to be but we still expect a healthy outlook for high-end residential properties in Qatar.

· The Pearl, West Bay and Lusail developments commanding the highest sale prices for apartments

· West Bay and Al Sadd areas proving the most popular fully-furnished apartments and demanding the highest monthly rents

o West Bay 2 Bedroom - QR 16,000+, 3 Bedroom - QR 24,000+

o Al Sadd 2 Bedroom - QR 9,000+, 3 Bedroom 11,000+

· West Bay and West Bay Lagoon recording highest villa rental rates - QR 37,000 pcm

Commenting further, Asteco Qatar General Manager David Oayda, said:

Khalifa Stadium

"Market confidence is a key factor in the success of real estate markets. Speculation has been rife in the period leading up to the global slowdown; however we've not witnessed strong evidence to suggest an overall softening in prices."

There is still demand for premium grade office accommodation, particularly in Qatar's newly recognised central business district, West Bay, where multinational companies, particularly within Qatar's oil and gas industry look to establish offices there.

Fanar Islamic Centre, Souq Waqif.

With existing demand for high quality commercial and residential rental properties, Asteco advise property investors to shift their focus to best managing their property portfolio rather than aiming for resale at this time. The company offers a full range of services such as sales, leasing, property management, valuation, market research and feasibility studies that aim to help customers look after the investment, whilst making it work for them in an increasingly competitive market.

Oayda added, "Qatar's economy is sound and expected to grow in 2009, providing business and employment opportunities for expatriates. Coupled with competitive financing options to own developments here, we expect the Qatar market to continue to provide good prospects for the year ahead."


Doha

Aerial view of Doha

Doha (Arabic: الدوحة‎, ad-Dawḥa or ad-Dōḥa, literally: "the big tree") is the capital city of the state of Qatar. Located on the Persian Gulf, it had a population of 998,651 in 2008, and is also one of the municipalities of Qatar. Doha is Qatar's largest city, with over 80% of the nation's population residing in Doha or its surrounding suburbs, and is also the economic centre of the country.

Doha International Airport

Jet Ski rider, Doha Corniche

Doha also serves as the seat of government of Qatar, which is ruled by Sheikh Hamad bin Khalifa Al Thani. Doha is home to the Education City, an area devoted to research and education. Doha was the site of the first ministerial-level meeting of the Doha Development Round of World Trade Organization negotiations. The city of Doha also held the 2006 Asian Games, which was the largest Asian Games ever held. It will also be the venue of the 2011 Pan Arab Games which will be from December 9th to 23rd. It hosted the AFC Asian Cup 2011 and will also host a large number of the venues for the 2022 FIFA World Cup. Doha is currently bidding to host the 2020 Summer Olympics.