Realty market set to grow ahead of 2022 World Cup

Qatar is expected to see strong growth prospects in its residential property market, ahead of 2022 FIFA World Cup, despite the ongoing low transactions, according to Asteco.“Based on our latest residential market report, the outlook for Qatar’s residential property market is positive. This can be attributed to its stable political environment, its strong economy, and the developments planned in preparation for the World Cup in 2022, which will transform the face of Qatar,” Elaine Jones, CEO, Asteco Property Management, said.

 
Finding that modest leasing activity characterises Qatar’s property sector over the second quarter (Q2) of this year, the Asteco report said overall average apartment rents in Qatar ranged from QR4,000 per month to QR14,000 for two-bedroom properties showing little change from the first quarter (Q1).
Rents remained stable, particularly in apartment rental areas such as Al Sadd and the Pearl-Qatar, with average two-bedroom apartment rents of QR6,250 a month and QR13,000 respectively, showing no movement from Q1 2011. The one and three bedroom market saw rent increase in a number of areas, it said, adding the majority of the enquiries are from people working in large corporations that are expanding or beginning new operations in Qatar.

Observing that leasing activity on Pearl-Qatar is strong and rents have remained stable since the previous quarter, it said “the slowdown in new units coming to the market has been one of the contributing factors to the stabilisation, coupled with Pearl-Qatar beginning to emerge as the preferred choice to live due to its contemporary living style and increased amenities as development phases continue.”

The activity on the Pearl-Qatar is set to strengthen in the coming months as new retail outlets come on line, Asteco said, adding Spinneys is expected to take up a temporary space by August, which will remove the necessity to travel to West Bay for grocery shopping and result in an increase of demand.
Although villa rentals remained steady, there were some marginal increases in prices in Al Dafna, it said. “This ongoing popularity is attributed to various factors including strong employment opportunities, the prevalence of large individual villas and beach access, with the area attracting senior expatriate staff, wealthy Qataris and diplomats,” it added.

Finding that sales transactions within residential sector in Qatar were low over the last quarter, it said “a gap remains between primary and secondary prices, although primary prices have stabilised and in some cases marginal increases in secondary process have been seen.”
Most prospective buyers are Western expatriates, GCC residents and there have been some enquiries from Qatari nationals who are primarily looking at distress properties, Asteco said.
In the commercial property sector, it said office rental rates showed a marginal decline of 3% over the previous quarter, but some areas have remained strong, including the B Ring Road area, which saw an increase of QR5 per square metre.

In September 2009, the Urban Planning Authority barred the use of residential villas as commercial office space and this is still leading to a large number of businesses and companies to relocate into commercial district, which results in a slowdown in the decrease of rental rates.
“In addition, the drop in rental rates has generates as increase in demand for office space, particularly for Grade A office stock mostly located in the Business district,” the report said.

The Pearl Qatar

  

Average apartment rent (qr/pm)
LOCATION    1 BR       2 BR       3 BR
Al Sadd          4,750    6,250       7,375
Bin Mahmoud 4,000    5,500       7,125
Al Muntazah   3,500   5,000       6,250
Najma             3,500   5,000       6,500
West Bay/Dafna 7,000 9,750 13,250
Al Mamoura    4,250   5,500    6,375
Bin Omran      4,250   5,500    6,250
Old Airport    4,750    6,250    6,500
Pearl-Qatar   9,500   13,000  16,250

New deluxe hotel opens

Senior executives from Hospitality Management Holdings (HMH) recently congregated at Corp Executive Hotel Doha Suites to celebrate the soft opening of the hotel.
Ahmad Ali al-Kuwari, Chairman, Al Kuwari International Group and owner of Corp Executive Hotel Doha Suites welcomed the delegation with a heartfelt speech. He observed: “Qatar is increasingly positioning itself as first-class financial and tourism destination in the region. This presents us with a unique opportunity that’s driving demand for quality hotels. Corp Executive Hotels is an outstanding brand specially designed for business travellers and we are delighted to be the first ones to flag it off in Qatar.” Al Kuwari International Group has several other projects under development.
Michel Noblet, President & CEO, HMH thanked the hosts for their warm welcome and hospitality and said: “The resilience of Qatari market in the face of the global slowdown has everything to do with the growth of the country’s economy. In just the first quarter of this year, Qatar has attracted over 1.8 million visitors which highlights the hotel sector’s potential. We are truly glad to be in this booming destination and are keen to develop more hotels.”
The evening highlights included a show-around of the newly opened deluxe hotel conveniently located just 5 minutes from Doha International Airport and Doha Corniche. The hotel offers 60 luxurious suites equipped with outstanding facilities and the latest technology including dual-line phones and voice messaging, high speed Internet connections, digital flat screen LCD televisions and satellite channels among other features.
The hotel has two restaurants, conference facilities, business centre, a roof-top swimming pool, male and female Moroccan bath and steam room and a fully-equipped gym.

Rental rate ‘declined in second quarter’

Weak demand growth and a continuous rise in supply have led to a “slight” ease in rents in Qatar in the second quarter (Q2) of this year, according to a Century 21 report.
The report also found that mid and long-term returns of real estate projects over the next few years are “feasible” despite the current imbalance of supply and demand.
“Overall, change in apartment rental rates over the months of Q2 was slightly negative,” it said.
The highest declines were seen in Bin Omran (more than 4%) while areas such as Al Matar and Bin Mahmoud saw a positive growth of 2% and 1% respectively, it said.
The average growth of apartment rental rates in the entire areas understudy has registered a positive 5% increase during April 2011 and two consecutive declines in the next months (May and June) at 1% and 5%, respectively, Century 21 said, adding, hence, apartment rents declined 1% in Doha over Q2 of this year.
“Rent declines are expected to continue over the next two months (summer vacation), while activity will rise after the end of the Holy month of Ramadan and before the start of school season,” it said.
However, villa rents have seen a better performance than apartments where some villa areas saw growth of rents; it said observing that the highest decline in rents was seen in Ain Khaled and Muraikh at 8% and 6% respectively, while Al Waab area saw the highest growth at 7%.
Overall, change in villa rents over Q2 recorded an increase of 1% in April and two consecutive declines of 1% during May and June. Hence, villa rents in Doha declined 1% between April and June 2011, it said.
On real estate transactions, it found that the total value recorded during Q2 of this year reached approximately QR7bn over 12 weeks starting from the beginning of April 2011. The last four weeks (May 29th to June 25th) have seen QR2.3bn in real estate purchases registered which is a relatively high figure.
Exceptional transactions at high prices were seen more often in investment areas such as Al Sadd, Bin Mahmoud and Al Dafnah. In addition, the market witnessed a number of deals to sell commercial and residential multi-storey buildings, of which one tower at least in the West Bay area, it said.
“Though growing continuously, the volume of real estate transactions remains modest as transactions are limited to local traders while foreign investments are yet to come,” it said.
On the commercial office rental market, Century 21 said high volume of supply and the continuous delivery of office space in the market are “still casting a long shadow over office rental rates”.
Leasing rates have seen declines of 2% on a monthly basis over the months of Q2 2011. In total, office leasing rates saw almost 9% decline since the beginning of the year, it said, adding slow growth of demand is also delaying recovery of the commercial real estate sector.
However, the government is still trying to lend a hand to property owners by leasing their properties on a long term basis, it found.
Despite the current imbalance of supply and demand, studies indicate that mid and long-term returns of project over the next few years are feasible, thanks to government plans and a broad economic recovery anticipated.
“It is anticipated that the next months, after the seasonal holidays, demand will improve and a better performance will be witnessed in the office space sector,” the report said.


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