Lusail City supply shifts office market momentum towards price correction
January 24 2020 08:29 PM
Lusail City
The additional office supply in Lusail City has shifted the momentum towards price correction

Qatar's office market segment is "battling" ways to sustain occupancies and monthly rentals, according to Al Asmakh Real Estate research.
The additional office supply in Lusail City has shifted the momentum towards price correction, its report said.
The average occupancies in West Bay offices are around 55% to 65% and the asking monthly average rental ranges from QR100 to QR140 per sqm.
The suburban business district (SBD) as in Doha downtown, C and D Ring road, Al Sadd, Salwa Road and Airport Road are commanding monthly rentals ranging between QR70 to QR100 per sqm; while the average occupancies in SBD is around 60% to 75%.
Lusail City, an emerging CBD (commercial business district) has added pressure with stabilised rentals and incentives to the CBD to retain clients, the report said.
During the fourth quarter of 2019, the estimated leasable areas were 5.2mn sqm and the annual average yield was 6.5% on occupancy of 65%.
In the case of the country's retail segment, the report said the organised supply is now around 1.5mn sqm. The increase in retail supply has impacted the performance of newly developed malls that are competing for tenants in a much challenging market.
The prime retail malls still command monthly rentals of between QR270 and QR300 per sqm. The occupancies in the prime malls are expected to be around 80% with anchor brands holding the maximum share.
The secondary malls command monthly rentals of around QR200 to QR260 per sqm; while the average occupancies in the secondary malls are around 80%.
"The stabilised rental rates across the malls have led to considerable occupancy and brand retention in most malls," it said, highlighting that another six malls are in the pipeline.
On the market outlook for the hospitality sector, the report, quoting Qatar Tourism Authority (QTA) figures, said total number of hotel and hotel apartment developments currently operating in Qatar officially is recorded at 123 which is close to around 26,700 keys across all star categories.
More than 75% of room keys are still with 4-star or 5-star and 70% of keys are confined in the West Bay alone. According to the Planning and Statistics Authority data, the average hotel occupancy in 5-star hotel during the fourth quarter of 2019 was around 62%; while average daily rates and revenue per available room were QR540 and QR332 respectively.



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