Qatar, whose capital Doha was once known for pearl fishing, is the wealthiest country in the Arab world. With a per capital soon to be said to overtake that of Switzerland, it has been strongly present in the map of the world energy market. Today, Qatari economy is growing towards further diversification from mere oil and energy. Its newly launched financial centre, Qatar Financial Centre is becoming strong rival to those in Bahrain and Dubai. For many, Qatar-watchers, it comes with no surprise to hear that Qatar is rapidly gaining attention among the global real estate investors. Former pearl-fishing capital Qatar is now about to shine as a pearl of Gulf real estate market.
Qatar real estate market is heating or rather call it “booming”. The Qatari Real Estate property show held in May attracted over 20,000 visitors from all the Gulf countries. This shows a strong potential of significant growth in Qatari real estate market. Key driver for this is namely expansion of oil and gas industry.
The government has announced to invest US$150bn in its infrastructure over the next five years.
Surprisingly, as opposed to the strong demand, supply-side seems to remain tight. Reasons for this are high cost of raw material /construction cost and regulations. Therefore, some estimate that the demand is exceeding the supply by the factor of four. Although the real estate supply is yet to grow in quantity, as we start to look more carefully, we will notice that the quality is certainly there.
Background of the country
Ruled by His Highness Sheikh Hamad bin Khalifa Al Thani, Qatar is a peninsula bordering the Persian Gulf and Saudi Arabia with a history that extends for more than 4000 years. This thumb-shaped small state is 11,437 sq km in size and comprises a number of islands including Haulul, Sheraouh, Al Besharriya, Al Safliya and Aaliya. It has population of 600,000 with most of whom reside in its capital, Doha.
Qatari people are proud to call themselves traditional, loyal and ambitious. They have a strong respect for their beliefs and take pride in the country’s history and culture. Although being traditional, Qatar has been very open and liberal to a drastic economic development and modernisation as well.
Since the mid 1800s, Qatar has been ruled by the Al Thani family and has been independent since 1971. When His Highness Sheikh Hamad came to power in 1995, he has decided to take the state into a new era of modernisation which drastically progressed Qatar in stature and wealth.
Infrastructure investments
Like many other countries in the Gulf region, Qatar puts significant effort in investing in infrastructure developments. The government has announced to invest US$150bn in its infrastructure over the next five years. Along with this, key public sector projects are in the pipeline to support the real estate sector growth.
In fact, Qatar is fully aware of the shortage of residential property supply and seems to be eager to establish a stable, long-term growth-oriented market to accommodate with all types of property.
As a result of this, many projects have been launched which complement each other in a sophisticated manner. Those new projects have a reputation to have been in a high-quality environment. That doesn’t say that other components are forgotten, as there are many projects covering campus-style office space, golf courses, amusement spaces and luxury hotels. Qatari market is going to be offering a full range of products.
Freehold ownership and demand
“Qatar economy is booming, however due to the increased raw material costs, new construction regulation change, and many other reasons, the supply side is not keeping up with the increased demand for residential properties.” A Qatar-based real estate agent, Ab Sher from Mirage explains about the current situation. However, he also stresses that this is not discouraging investors from looking at the market.
Main buyers of properties in Qatar is said to consist of two different groups, “buy-to-let” investors and home buyers. The former are dominated by the locals, namely Qataris. Interestingly, an increasing number of women are participating in this property investment boom as they are becoming more independent. The latter group consists of mainly expatriates moving in to the country after rewarding career opportunities in the field of energy, construction/real estate and financial sector. Competitive mortgage rate is one of the factors to accelerate purchase of their dream home. Many consider that rather than paying around US$2000 to US$4000 a month for a single bedroom, they would pay mortgage back.
However, one of the obstacles for expatriates and foreign investors is the limited freehold properties. In 2004, the government passed Law 17 which allowed foreigners to own outright residential property in limited number of developments, such as the Pearl-Qatar, Al Khour Resort and Lusail. Although there are only a few places to invest in, these three are all astonishingly “mega” projects.
The Pearl – Qatar
The Pearl-Qatar is a multibillion dollar project, a string of offshore islands with two circles which will feature harbours like a mirror-image of the natural shape of Doha harbour. This multi-building project will have an entire area of nearly 4 million sq m and create over 32 km of new coastline.
Located 350 metres offshore of Doha’s prestigious West Bay District and only 25 kilometers away from Doha International Airport, this project will be home to over 40,000 residents in more than 15,000 dwellings within 12 inspiring precincts by 2010. The project is Qatar’s first international real estate venture and one of the largest and the most expensive real estate developments of its kind ever undertaken in the country. In addition, this island is the first development in the region to guarantee 100% foreign ownership of the actual freehold property.
The up-market, multicultural residential community offers residents a secure and exclusive island retreat which brings the ambience and lifestyle of the Mediterranean to the heart of the Gulf. With its beachfront villas, elegant townhouses, luxury apartments, exclusive penthouses, five-star hotels, marinas, schools as well as high-quality retail, restaurant, cinema and lifestyle amenities, the island is the location of choice and benchmarked by the very best. The developer calls this “a lavish, secure and exclusive island retreat with a Riviera-style design and spirit”.
The main concept of the development is to bring the ambience and lifestyle of the Mediterranean to the heart of the Gulf. The three marinas to be built here will be big enough for 800 boats. The island will be splendidly beautiful with canals, lakes and interior navigable coves. The yacht club here will be catering the international, regional and local yachting community, and will be an exceptional centerpiece for residents and visitors to the island.
The Pearl has allocated land for specific developments by hotel owners and operators. Large hospitality developments – such as the recently announced Four Seasons Hotel and Resorts on Porto Arabia – are privately owned. The plan will also include high-end boutique hotels, resorts and destination spas, which will add tremendous value to residents of the various areas on The Pearl Qatar. For the shopaholics, this island will provide superior shopping experience as brand names like Emporio Armani, Gucci, Dolce & Gabbana, Louis Vuitton, Chanel, Chopard, Harry Winston and others are expected to establish a presence in this new upscale shopping venue. For water-sports lovers, this island will present many exciting opportunities for a variety of water sports, including sailing, windsurfing and snorkelling. While the beach, with its crystal clear water, is ideal for water sports enthusiasts, it is also perfect for a relaxing family picnic or get-together.
The developer of this ground-breaking project is the United Development Company (UDC), Qatar’s largest private sector shareholding company. Their mission is to “identify and invest in long-term projects that contribute to the country’s growth and provide good shareholder value. “Following this, UDC’s vision with respect to The Pearl-Qatar was building “a unique living and cultural experience that integrates the best of the country’s past and present.” The name of the project, “The Pearl” comes from this philosophy as well. UDC’s primary objective was “to incorporate a diversity of high quality living environments – from high-end luxurious villa living with private sandy beaches to fashionable apartment-style accommodation with sweeping sea views”. Taking a closer look at this developments, we will be able to understand what standard Qatar real estate market is trying to set.
Porto Arabia
One of the largest precincts among the 12 theme districts is Porto Arabia, offering elegant towers and townhouses. First phase will be set around a colourful waterfront called “La Croisette”, a lively 2.5 km concourse lined with fine shopping and dining, its architecture inspired by French, Italian and Spanish architecture. Residential towers will be lining a Riviera-like boardwalk around the 400-boat slip marina.
The yacht club here will be catering the international, regional and local yachting community.
The town houses, “Croisette Town homes” are expected to have luxurious amenities and a truly Mediterranean ambience and sit on the marina’s edge to offer superb views.
Porto Arabia is also designed to offer fine dining experience, café culture, elegant shopping as well as lively street markets. It does sound a bit like any cozy town in Europe. At the very heart of Porto Arabia lies the Marsa Arabia island. Accessed via a causeway, this picturesque ‘island-within-an-island’ will feature an exclusive Four Seasons Hotel serving Qatar’s business and leisure travellers from around the world.
Viva Bahriya
Complete with its own stretch of pristine white sand gently lapped by a warm, inviting sea, Viva Bahriya is ideal for anyone seeking a relaxed, family-oriented environment that’s only moments from the buzz of neighbouring precincts. Architecturally themed to echo the very best of the Maghreb – with Moroccan-styled town homes and apartments exuding Moorish elegance and Latin Mediterranean themes – Viva Bahriya features a balanced combination of residential, recreation and community facilities.
Qanat Quartier
With its colourful Venetian character, Qanat Quartier is carefully planned around intricate canals and pedestrian-friendly squares and plazas. Each waterway is spanned by stylish bridges which will capture the soul of a truly Italian romantic living in luxurious waterfront town houses and apartments.
The villas dotted along the meandering coastline of The Pearl-Qatar are the discreet La Plage Villas and the island-style dwellings with private beaches of Bahri Villas. These residences exhibit the most sublime Mediterranean qualities, and each designed with the most discriminating investor and home buyer in mind.
MedinaCentrale
The island’s ‘town centre’ offers a full range of retail and community services, including a cinema, banks, supermarkets, schools and numerous parks. Set around a square, Medina Centrale is a prime residential area in its own right, with units conveniently located above retail zones in medium height blocks.
Abraj Quartier
With its own dedicated beach and landscaped gardens, Abraj Quartier is the perfect environment for those seeking more spacious surroundings.
Located at the gateway to The Pearl-Qatar, these warm and friendly residences enjoy superb views across the azure waters of the Arabian Gulf to the mainland.
Costa Malaz
With Polynesian architecture and landscaping which evoke tropical island life, Costa Malaz is an oasis of calm and quiet luxury in an area of outstanding beauty. Setting new standards for exclusive health and wellness retreats, this sanctuary features luxury family beach villas on generous plots.
Fanar Fayrouz Villas
Fanar Fayrouz Villas enjoy spacious opulence and incredible views across the Arabian Gulf – including spectacular sunrises. Warm breezes and uninterrupted vistas make Fanar Fayrouz Villas another truly delightful area, a place to comfortably create the ultimate beachfront home.
Giardino Villas
With its landscaped parkland and picturesque lakes, Giardino Villas is a highly-prized residential district. Spacious homes nestle in beautifully arranged gardens shaded by trees, and colourful foliage contrasts with panoramic marine and mainland views. Clubhouses, sports and walking tracks are easily accessible.
Perlita Villas
Immediately to the south of Medina Centrale lies Perlita Villas, a mixed villa and town house development in a secluded, natural setting. Lush landscaping and saltwater lakes provide beautiful aspects and numerous opportunities for many forms of recreation.
The vision for lusail is that it will someday become home to 200,000 residents.
Floresta town houses
Arranged around a central parkland area, these properties enjoy easy access to the beaches and facilities of the bays fringing The Pearl-Qatar Island. A true garden-meets-the-sea precinct, it is characterised by quality properties on a grand scale, accommodating even extended families in comfort and style.
Isola Dana
The jewels in The Pear-Qatar’s crown, each of these nine independent private islands features its own beach and protected harbour. Among the world’s most spectacular addresses, Isola Dana presents absolute living in palatial villas, each accessed via its own causeway.
Soaring achievements
Last year was a landmark year for UDC, thanks to the enthusiastic reception of The Pearl-Qatar project and brisk sales that are still continuing. UDC has also proved it can bring an ambitious project like this to fruition. Progress on all fronts of the project has been excellent and all 31 tower plots of Porto Arabia, the first development to be completed, are already sold out. To meet increasing demand, in fact, the second phase of the sale of tower plots in Viva Bahriya started in the last quarter of 2005, and in May 2005, three islands in The Pearl-Qatar including Marsa Arabia in the Porto Arabia were sold to investors for hospitality development. Eventually these projects will provide 800 new five-star hotel rooms. Construction of the massive quay wall for Porto Arabia was completed in March 2006, an incredible engineering feat that stretches 4.5 km and includes more than 10,000 precast concrete blocks and structures.
Mortgages/financing options
Not only is this development open to foreign investors but offers financing options as well. Mortgages are available for up to 25 years and up to 85% of the total purchase price could be financed. Also, when you buy a property the purchaser can obtain residency for himself and for his dependents. This is guaranteed as long as one is “disease-free” (this refers to infectious diseases like HIV and TB), and do not have a criminal record.
Lusail mega-project
Unlike other projects, one cannot miss the Lusail development. This project is worth taking a good look at. Lusail development project takes up to 21 sq km, and is located north of the city of Doha. It is said to be one of the most strategic pieces of waterfront real estate in Qatar, offering a mixture of residential, business, entertainment and tourist facilities. The vision for Lusail is that it will someday become home to 200,000 residents. The site extends north of the Ritz Carlton Hotel, and borders the sea to the east and Al Khor highway to the west.
The project is designed to promote a family-friendly environment by creating a self-sustained community comprising residential, commercial, retail, hospitality, resort and entertainment venues.
Lusail is not just a real estate development, it will become an entirely new city that enhances the Qatari economy and creates the first regional energy hub in the Middle East, housing ‘Energy City’. The strategy revolves around synergy between market needs and identifying anchor tenants in this area.
EnergyCity
As part of the Lusail development, a phenomenal industrial city, coined ‘Energy City’, is planned. This is a pioneering development that will be the Gulf’s first hydrocarbon industry centre. The project aims to attract the industry leaders of oil and gas companies, support services, infrastructure and downstream activities, shipping and trading, market and resource data, intellectual property and energy trading companies.
Since the vision is to provide a live, work and play solution to energy industry players and their families, residential areas are planned in close proximity to the business hub.
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