Qatar is set to account for 34,000 hotel keys and hotel apartments, 308,000 residential units and an office supply of 5.8 sqm gross leasable area (GLA) in 2020, a new research has shown.
This, according to research and consultancy firm ValuStrat, depends on "delivery of all projects on time".
Nearly 70% of the upcoming residential supply in 2020 is projected to launch in prime locations such as Al Dafna, Lusail and The Pearl, which “might negatively impact” the market rent in the area once projects are handed over.
Vacancy in secondary locations may increase as residents might prefer shifting to more competitive premium locations. In addition, capital values of low-quality villas outside Doha may experience “downward pressure” as a result of the increasing competitiveness of villas in prime locations.
Anum Hasan, ValuStrat Qatar Market Research analyst, said, “For the past two years, both capital values and rental rates have been declining, however, at a decreasing rate. In 2018, both capital values and rents fell by 9% and 11% annually. In 2019, capital values reduced by 5% year-on-year (y-o-y) and rental rates dipped by 7% annually. This trajectory is projected to carry over to 2020 as both values and rents are expected to soften due to impending supply.”
In the office sector, rents are expected to decline in Lusail, as 65% of the projected supply for 2020 will be focused therein, ValuStrat noted.
Upcoming malls in Qatar during 2020 include J Mall in Al Markhiya, La Plage 04 Mall in The Pearl and Doha Mall in Al Mamoura.
Retail performance in terms of occupancy is projected to improve due to temporary increase in demand as World Cup 2022 nears, especially for shopping centres, which are introducing anchor tenants from entertainment and speciality food and beverage to draw footfall.
Hospitality sector is expected to see an addition of some eight properties (both 4 and 5-star): Zulal Wellness Resort, Panorama Residences & Suites, Plaza Rayhaan, Pullman Hotel, Samrya Quartier Hotel & Apartments, The Plaza Doha, The Vyra and Aleph Residences. Due to the expected increase in visitors and dipping room rates, occupancy is anticipated to increase across all hotel categories.
International Monetary Fund (IMF) adjusted the GDP growth projections to 2.8% for 2020 from 2% in 2019.
The state budget for 2020 was recently announced, which forecasted a budget surplus of QR500mn, amidst a continued conservative oil price estimate of $55 a barrel.
Expenditure in major projects has been budgeted at QR90bn of which infrastructure projects accounted for the largest share.
And by the end of 2020, the population of Qatar is projected to reach 2.88mn, ValuStrat noted.
Related Story