There are signs of a drop in office rents in the country due to high availability, say real estate experts.
While rents have already been cut by 10% in some cases, more such reductions are likely in the coming days, they point out.
Informing this, a report in local Arabic daily Arrayah has also stressed that there is hardly any chance of the trend reversing and rents for office space
A number of real estate experts and professionals noted that “reasonable and low rents” would have a positive impact on the local market, while “inflated rents” were generally harmful for business, particularly small and medium-sized enterprises (SMEs).
Ahmed al-Arouqi, director of a local real-estate company, said “a good number” of office complexes in areas such as West Bay and Lusail entered the market recently. This has led to a situation where supply is greater than the demand, it was observed.
Al-Arouqi observed that regular annual increases in rents had stopped and the market was likely to see more reductions in the upcoming period.
He, however, acknowledged that many real estate owners were reluctant to act in accordance with market realities and set their own prices, sometimes making their units lie vacant for long periods.
Similarly, Taha Abdulghani, director of a local business consultancy firm, said the oversupply of administrative and service units had led to a rent reduction of around 10% reduction in many places.
He also claimed that low oil prices had reduced the demand for office units and also made many business operators keener to reduce administrative expenses.
Abdulghani stressed that the trend of dropping rents would reflect positively on businesses in the country, particularly SMEs and startups.
Qatari businessman Khalid al-Kuwari said the real estate market was currently stable, especially in terms of office space rents. He expected a reduction in current rates by around 10%.
Al-Kuwari also said regulations and laws governing the percentage of any rent increase could help stabilise the market.
Besides, the authorities should open the doors for more real estate developers and investors to build new commercial and administrative units to increase the supply, he felt.
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