Office rents are unlikely to rise in Qatar until the end of 2010, a new report said on Tuesday.
With high levels of supply coming to the market and dampened demand due to the global crisis, rental rates would be under pressure in the medium term, according to research by global property adviser DTZ on Qatar’s real estate market.
Buildings in Doha’s Diplomatic District commanded higher prices of QR250 ($68.70) per sq m than secondary locations like Grand Hamad Street and Al Sadd where average rental rates ranged from QR150 ($41.30) to QR180 ($49.50) per sq m.
Nick Witty, deputy managing director for DTZ Middle East warned the office sector would develop into a ‘two tier’ market with current levels of supply.
“As the market continues to grow and mature, greater levels of stock will offer potential occupiers a choice of accommodation and lead to the development of a two-tier office market,” he said.
“High quality, modern offices, designed and built to meet occupier requirements will command a premium over lower quality stock which will lead to increasing levels of vacancy in the secondary stock.”
On Qatar’s residential market, which has been badly hit due to liquidity problems, DTZ was upbeat and predicted demand to hold up in the face of a growing economy and population growth.
Apartment and villa prices stablised in the final quarter of 2008, the property company said.
Residential rents were likely to fall between five and ten percent in 2009, it added.