The housing market in Doha is undersupplied by as much as
40,000 units, one of the Gulf’s largest real estate consultancies has said.
With more than 142,000 residents and just 102,000
properties available, Qatar’s capital city is a profitable market for
developers, said Colliers International analyst JP Grobbelaar.
“The residential sector has traditionally been
undersupplied and it remains undersupplied in the overall sense,” said
Grobbelaar. “The high end of the market is becoming saturated. Developers have
been focusing on this area because this is where the larger profits lie.
“The truth is that the greatest demand for residential
space comes from the expatriate population, which is far bigger than the local
population. So as the expatriate population is growing so is demand for mid
high-end properties, things like townhouses, villas and apartments. That is an
area of the market which could quite lucratively be looked at by developers
inside and outside of Doha.”
Qatar’s retail market is also hampered by a lack of
supply, said Marwan Shehadeh, group director at Al Futtaim Capital, which is
currently building Qatar’s largest mall.
Despite good purchasing power – according to Credit
Suisse Bank, the per capita income
in Qatar is estimated at
$10,9000 – the retail market currently spans 630,000m sq of gross leasable area
(GLA) against a capacity of 1,000,000 m sq.
“We believe there is a gap in the Doha market today, and
a strong demand for proper, super-regional, retail and entertainment
destinations,” said Shehadeh. “Qatar is currently probably the richest city in
the world and yet it doesn’t have world class retail destinations.”
In the commercial sector, Doha has seen rates for A-grade
office space fall by as much as 15 percent in the last year. Margins are likely
to be further squeezed with the addition of another 200,000m sq of office space
scheduled to come on line in 2011.
In the hospitality sector, much depends on the success of
Qatar’s bid to host the 2022 FIFA World Cup. Currently the market is “heading
for huge oversupply” according to Grobbelaar, with another 4,200 hotel rooms
slated for delivery by 2012.
Average room rates in Doha have dropped 17 percent since
2009 while revenue per available room has declined by almost a third.
“I think there are still people in the country looking at
investing in this direction [hospitality],” said Ayman Al Barqawi, Qatar
resident director for Arabtec.
The construction firm has three ongoing projects in the country worth a
combined QR4bn (about $1.09bn).
“I can’t say there isn’t oversupply because the rates are
coming down but I think the market here will absorb that oversupply quite
quickly. I think the country will cope with the oversupply. There is still
confidence in the market,” Al Barqawi said.