Posted on May 19, 2018

An estimated 13,000 residential units are projected to be completed in Qatar by the end of 2018, leading consultancy firm ValuStrat has said in its latest report. According to the report, the new units would include 14 high rise apartment blocks on The Pearl and 36 apartment buildings in the upcoming Lusail City.

The total housing stock by the end of 2017 was approximately 286,125 units, the report said, adding that nearly 1,200 units were added in the first quarter of 2018. While apartment supply consisted of 960 units coming from new additions in Lusail, Fereej Bin Mahmoud, Al Sadd and Najma, the report said, the completion of villa compounds in Ain Khalid, Al Maamoura and Umm Salal Ali added 240 units to the total stock. With supply coming from 24 hospitality projects currently under construction, the report also revealed that the number of total hotel rooms is expected to reach from the current 26,246 rooms to 32,645 by the year-end.

According to the report, Qatar residential prices have witnessed a fall in values since the ValuStrat Price Index (VPI) began tracking residential prices in the country in January 2016. The 2018 first quarter VPI displayed overall 9.4 percent annual and 1.6 percent quarterly declines. Villas and freehold apartments saw quarterly price declines of 1.6 percent and 1.7 percent respectively. While a few locations saw marginal declines, others experienced steeper falls.

Quarterly capital depreciation between 0.4 percent and 2.7 percent was seen in clusters of Al Wakrah, Al Khor, Umm Salal Mohammad, Old Airport, Al Thumama, Al Waab, West Bay Lagoon, New Al Rayyan/Muaither and decline of 4 to 4.4 percent was seen in Ain Khalid/Abu Hamour and Umm Salal Ali. Gross yields for residential units averaged at 4.8 percent, with 6 percent for apartments and 4.2 percent for villas. The year-on-year (YoY) and quarter-on-quarter (QoQ) median transacted prices for residential houses reduced by 5.67 percent, the report said.

Transaction volume for houses declined 14 percent YoY and 13 percent, it added. The five largest ticket sizes were seen in The Pearl, Muraikh, New Al Salata, Rawdhat Al Hamama and Al Mashaf for developed plots ranging from 1,500 sqm to 7,500 sqm. Majority of transactions were in Al Rayyan (29 percent) followed by Doha (21 percent), Al Daayen (20 percent) and Umm Salal (12 percent). There were 30 transactions for residential buildings with 45 percent transactions above the median ticket price of QR9,000,000 concentrated in The Pearl, Fereej Abdul Aziz and Old Airport.

According to the report, the total estimated gross leasable area (GLA) of Qatar's office supply stood at 3.94 million sqm. Five office buildings were added this quarter with two in Lusail (Energy City) and one each in Fereej Bin Mahmoud, Al Muntazah (C Ring Road) and Al Aziziya (Salwa Road), comprising 50,000 sq m GLA. An estimated 910,000 sq m is in the pipeline in 2018, with at least 70 percent concentrated in Lusail, it said. As of the first quarter of 2018, the report said, the total supply of organised retail space reached 1.76 million sqm.

Approximately 100,000 sq m GLA of unorganised retail space including street retail stores, supermarkets and traditional souqs is projected for completion by the end of 2018. Based on GLA and population figures, the report said, shopping centre GLA of Qatar is 667 sqm per 1,000 capita compared to the GCC average of 580 sqm per 1,000 capita retail supply. Despite an influx of supply, rents and occupancy rates remained stable among prime shopping destinations, it said.

Median monthly rents per sqm were QR400 for small line shops (less than 100 sqm) and QR280 for large line shops in the range of 250-500 sqm. Effective rents were negatively impacted by landlords offering increased incentives to existing tenants, in an effort to maintain occupancy rates in the midst of increased competition from new supply.

source: Qatar Tribune

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