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Well managed properties continue to hold rental values in H1

Well managed properties continue to hold rental values in H1

Satyendra Pathak
Doha
Well managed properties continued to hold rental values in the first half of 2019, Al Asmakh Valuations and Research Director Gaurav Borikar has said.
According to Borikar, such properties attracted the same rents in the first half of 2019 as it was in the second half of the previous year.
While metropolitan areas in Qatar are growing, Borikar said, the current real estate cycle from 2019 is yet to witness significant price movement for residential properties in several districts of the country.
According to Borikar, the rental rate movement depends on several factors like the location of the property, condition of the building, property management, and tenant mix.
“The location of the property is the primary factor in deciding the rental rates and occupancy that ultimately impact the leasing strategy of the owner. The better-located properties do not mean those in and around downtown, rather it means the property that has better access, capacity to accommodate parking for the residents and visitors, approach to arterial roads, and then access to the markets and schools,” he said.
These are the reasons why the properties that are located in downtown areas and are within the reach of the market are sometimes unable to perform better than those that meet the principal factors, he said.
The second factor is the condition of the building that can equally influence the rental rates.
Properties with mediocre to superior specifications are preferred over properties with inferior or on the contrary ultra-luxurious specifications.
“The specifications should be in-line with the location of the property. Properties located in a mid-income area with ultra-luxurious specification might not secure a significantly higher rental rate or vice versa,” he said.
Citing property management as a game changer, he said, “It has been noticed that properties constructed with better specifications but not well managed loses the scale of rental rates than the mediocre but better-managed properties that hold the rental rates in the long run.”
In order to secure quick occupancy and fixed income for a narrow period of time, he said, many owners prefer to lease the property to the companies for accommodating their bachelor employees.
This action may lead to quick property depreciation and difficult prospect in renting to households, he said.
“The owner should decide one of the options for the property. It should be either to lease to companies for the bachelor employees or to households. Shifting the renting strategy won’t secure or hold better rental rates in the future,” he said.
“The rental rate movement depends upon these factors. Otherwise, it would be incorrect to say that overall property prices are moving in either direction,” he said.
The rental rates held values largely for all those properties that fulfilled these four principles in most locations in the first half of 2019, he said.
“The unmanaged properties are unable to hold the rental value and occupancy. This is the reason why the market is creating perceptions about negative trends. Otherwise, the rentals are almost the same as of the second half of 2018,” he said.
The monthly rental rate for a 2-bedroom apartment in and around C-Ring Road areas is in the range of QR5,000 to QR5,500, the similar apartment in The Pearl is around QR9,000 to QR13,000 and in West Bay QR10,000 to QR13,500.
The monthly rental rate for a 4-bedroom villa in a compound in Al Waab is in the range of QR12,000 to 18,000; in Ain Khaled is about QR10,000 to QR14,000, and in Gharaffa QR9,000 to QR12,000. The similar villa in West Bay Lagoons can be rented out at an average price of QR25,000.

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