+ A
A -
Asif Iqbal
Doha
The residential market in Doha is seeing a drop in rents in most areas due to an increase in vacant units, a new report has said.
"A fall in demand for residential accommodations in areas such as Al Sadd and Bin Mahmoud coupled with the completion of a large number of new building complexes has resulted in a fall in rents," DTZ said in its report on Tuesday.
On the otherhand, there has been an increase in demand for both apartments and villas in more peripheral suburbs such as Ain Khaled, Abu Hamour and Muaither, where cost sensitive residents can lease units in purpose built developments at substantially lower rents than in central Doha.
The report said the increasing provisions of 'affordable housing' on the outskirts of Doha is putting pressure on landlords in more central locations to provide more flexible lease terms for vacant units, with many offering apartments and villas at rents that are 5 to 10 percent below the rate in 2015.
At the premium end of the market, the report said, rents in The Pearl Qatar and West Bay are 10 percent lower than in 2015.
It is unlikely that rents will increase again in the short term due to new supply that is likely to come to the market between now and 2018.
About the hospitality sector, the report said that more than 26,000 hotel rooms and hotel apartments in 69 buildings are currently at various stages of construction.
"On completion, this will increase the overall supply to more than 47,000 rooms. However, Qatar will need to place a heavy emphasis on the development of the tourism industry in the coming years to support this sector," the DTZ report said.
On the retail segment, the report said the recent economic slowdown has impacted the retail sector. The retail spending was reported to be down by 10 to 15 percent since 2015.
"The more challenging climate for retailers has not yet been reflected in a significant increase in vacancy levels or reduction in rents, as retailers will be subject to lease terms of five years and will take a longer term view on the prevailing economic climate," the report said.
The report pointed out that the supply of retail accommodation is set to increase by almost 200,000 sq m with the Mall of Qatar scheduled to open in December.
"There are currently 11 new retail malls under construction throughout Doha and its environs, which will increase overall supply of accommodation in retail malls to 1.85 million square metres," the report said.
