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Rental forecast for residential and commercial properties in Doha

House rentals in Doha may continue to rise in the next one to two months, despite the decline in oil prices, said DTZ, real estate consultancy. The growth in rentals may be in the range of five to ten percent, driven by growing population.

The Associate Director, Consulting and Research at DTZ, Johnny Archer said that there may not be any relief from high rents in the near term, but, the rents may witness downward pressure if oil prices continue to remain low for longer period.

Due to the recent dip in oil prices, some of the major oil and gas companies have placed their requirements for new residential accommodations on hold. Although this has not hit the overall demand levels, a prolonged period of low oil prices may lead to wider market reduction in demand over time, thereby easing pressure on supply and rental levels, said Edd Brookes, Senior Director, General Manager, DTZ.

The projection for rents by DTZ is only for Doha, the officials clarified. DTZ expects that up to four or more residential towers at the Pearl Qatar may potentially be completed and made available to the market during second quarter of the year subject to approval being received from civil defence requirements, which increased supply by more than 700 apartment units.

On the other hand, the commercial real estate market has begun to achieve stability in rentals. The office leasing market has given a slow start to the year, with only few major transactions recorded during first quarter of 2015, Archer said.

At present, the West Bay region has about 1.637million sqm of purpose built office space, and another 300,000 sqm of office space will be added to the West Bay market and Lusail by the year-end, which will increase supply and ease spiralling of rentals, he said.

The hospitality sector in Qatar will witness strong growth over the coming years. The data by Qatar Tourism Authority reveal that approvals are already in place for 124 hotel establishments in Qatar, which if realized will increase the supply levels to about 35,000 keys, Archer said.

In the retail sector, the consultancy firm expects retail market to see opening of 12 shopping malls by the year 2019. DTZ estimates that there is more than 1.2million sqm of retail space in the 12 new shopping malls and they are now in various stages of design or construction and they may be opened by 2019.

Posted on 28/4/2015

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