Qatar Retail Space Rents: Doha And Lusail Decrease, Al Rayyan Increases In Q1 2024
Retail space rents outside malls in Qatar have seen adjustments in Q1 of 2024, reverting back to the levels observed in Q3 of 2023, after experiencing a spike in the last quarter of the previous year. This trend has been highlighted in a recent analysis conducted by hapondo, Qatar's leading online real estate marketplace. The data a mixed landscape in terms of rent fluctuations across various districts, with most areas witnessing a decrease in asking rents, except for Al Rayyan which observed an upward trend.
In Doha, the average asking rent for shop spaces dropped from QAR 214 per square meter in the last quarter of 2023 to QAR 182 per square meter in Q1 of 2024, slightly above the prices of Q3. Al Sadd, a key commercial area, experienced a decrease in average rent for the second consecutive quarter, registering at QAR 157 per square meter in the opening quarter of the year.
Lusail and Umm Salal also saw reductions in their average asking rents for available shops. Lusail's average asking rent decreased by 2% to QAR 195 per square square meter, and Umm Salal experienced a more significant drop of 9%, from QAR 230 per square meter to QAR 209 per square meter quarter-on-quarter. On the other hand, Al Rayyan displayed resilience with its average asking rent increasing from QAR 205 per square meter in Q3 2023 to QAR 228 per square meter in Q1 2024, indicating a robust demand for tenant spaces in this locality.
Ahmad Al-Khanji, Chief Executive Officer of hapondo, provided insight into the rental trends observed in the last quarter of the previous year and the adjustments seen in Q1. Al-Khanji noted, "In Q4 last year, we saw the average rents of shops increase in several places in Qatar on the backdrop of two themes. Firstly, landlords were quite optimistic about retail activities due to the upcoming AFC and other events in early 2024. Secondly, our Doha shop listings doubled in number in Q4 and at higher rates – evidence of spaces that were likely rented during the FIFA World Cup and which were either pre-terminated or not renewed a year after." He further added, "In Q1, landlords tempered their expectations and therefore we saw adjustments in the average rent of available stock in many places in Qatar."
The decline in rental prices is seen as a positive development for tenants, particularly as the retail sector outside malls continues to offer a considerable amount of listed fitted space, enabling businesses to save on fit-out costs.
Developments in Qatar's Retail Sector
Despite the downward pressure on rents for shop spaces outside malls, the last six months have witnessed significant developments within Qatar's mall retail sector. The launch of Velero Mall late last year introduced new prime retail spaces in Lusail, contributing to the diversification of Qatar's retail offerings. Furthermore, Qatar Tourism has actively promoted the country as a premier retail destination through the Shop Qatar campaign.
A testament to the growing demand in the real estate sector, Doha Festival City announced its 500th lease, marking the shopping center as fully rented. This milestone underscores the continued appeal of Qatar's retail environment to both local and international retailers.
The adjustments in the retail rental market, coupled with the development of prime retail spaces and successful promotional campaigns, reflect the dynamic nature of Qatar's retail real estate sector. These trends highlight the market's ability to adapt to changing conditions while maintaining a positive outlook for the future.
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