Qatar's malls, outdoor retail, and food and beverages (F&B) markets are expected to remain resilient as developers continue to capture local and international demand by providing a destination and entertainment focused retail experience, according to Investment Promotion Agency (IPA) Qatar-Ernst & Young report.
An estimated gross leasable area of 0.71 per capita indicates there is a likely opportunity to bridge the underlying gap through offering unique concepts complemented with leisure and entertainment experience, the report said.
“The destination and entertainment focused retail developments will continue to attract demand, with majority of the retail offerings concentrated in north Doha and Al Rayyan,” it said.
The expected increase in supply would create a two-tiered market in Qatar, with prime malls attracting higher footfall owing to unique concepts and leisure provisions, according to it.
The report said additional supply estimated at 500,000sq m by 2022 and retail spend and turnover are likely to benefit from anticipated rebound in tourist arrivals and relaxation of Covid-19 restrictions.
Retail real estate witnessed a “significant” growth in the last four years with many shopping malls scheduled to open in the current year to capture the footfall, which will be generated from iconic events, such as FIFA World Cup (2022), FINA World Championships (2023), World Horticultural Exposition (2023) and Asian Games (2030).
The country has a retail stock of 1.96mn sq m with 80% occupancy as of 2021. Based on location, 42% of the retail stock is in Doha, 31% in Al Rayyan, 14% in Al Daayen, 5% in Al Wakra, 5% in Umm Slal and 3% in Al Khor.
As per the heat map, it is observed that there is an opportunity for community and neighbourhood malls in the outskirts of Doha.
Qatar has 29 malls across six municipalities. With a majority of malls concentrated in Doha, new malls in Al Daayen, Al Wakra and Al Rayyan are strengthening their foothold by maintaining stable footfalls.
Total consumer spending witnessed a compound annual growth rate (CAGR) of 1.5% during 2015-20, with the majority of consumer spending in Qatar (approximately 29%) attributable to housing and utilities, followed by F&B (approximately 15%).
Super-regional malls performed better in terms of footfall, occupancy, and lease rates compared with the smaller community and neighbourhood malls.
"With the current market conditions, the yield rates for super regional malls are estimated to be in the range of 7%-8% while for smaller retail offerings the yields are slightly higher," it said.
Average lease rates have decreased between 2015 and 2020, with street retail at a CAGR of -5.7% and malls at a CAGR of -1.7% during the period, respectively.