The increasing interest from occupiers is likely to see a “significant” increase in office take-up in the Lusail's Marina district over the next two years, according to Cushman and Wakefield Qatar (CWQ).
"As the Marina District matures, we expect to see tenants attracted by competitive rents, transport and parking provisions, and the increasing amenities and food and beverage (F&B) on offer," CWQ said in a report.
More than 11% of (Qatar’s total) supply is in Lusail’s Marina District, where supply has doubled over in the past 24 months.
The recent lack of rental activity and increasing availability is continuing to put downward pressure on office rents and increase the incentives on offer to attract occupiers.
The CAT-A and fitted office space in West Bay is typically available for between QR100 and QR140 per sqm per month exclusive of service charges, although tenants can secure rent-free periods on some buildings.
The prime, CAT-A specification offices in Lusail are available for QR90 to QR120 per sqm per month, reflecting the fact that it is a new district trying to attract tenants and build occupancy rates.
Shell-and-core offices are now available to lease for between QR80 and QR100 per sqm per month in West Bay. Shell-and-core offices in secondary locations can be leased for as little as QR60 per sqm per month.
During 2010-19, the demand for office buildings in the West Bay came mainly from the government (37%), oil and gas companies (15%), financial services and construction (14% each), miscellaneous (8%), and professional services and technology (6% each).
The private sector demand for offices is almost exclusively concentrated on CAT-A or fitted offices, as companies look to minimise the capital expenditure required to fit out shell-and-core space, it said.
As new buildings complete and the volume of available space increases, CWQ expects the amount of office accommodation fitted to CAT-A standard to increase as landlords compete for the smaller pool of prospective tenants.
The new office demand has reduced over the past six months, as many companies re-assess their corporate strategies due to the Covid-19 pandemic.
The increased economic uncertainty has resulted in some proposed office acquisitions and relocations being put on-hold in 2020, while there has also been evidence of companies in Qatar deciding to downsize their office requirements, CWQ said.
“Despite the challenges of 2020, Qatar’s real estate market has held up remarkably well, with West Bay prime commercial and prime villa rents stabilising over the nine months of 2020 to date," said Edd Brookes, general manager of CWQ.
The report estimates that overall office supply in Doha has now reached about 4.9mn sqm. More than 30% of office accommodation is situated in West Bay, Qatar’s central business district.