By Staff writer
New CBRE report says close to 1.27 million sq m of new retail space set to be completed over the next three years
Qatar's prime retail malls continue to enjoy relatively stable rentals and high occupancy rates, despite ever increasing supply and the emergence of weaker consumer confidence, according to CBRE.
Its H1 2016 Qatar MarketView said Villagio and City Centre Doha are two of the country's main shopping destinations, with average daily footfalls of around 46,000 and 45,000 respectively.
However, CBRE said competition levels are rising rapidly, with close to 1.27 million square metres of new retail space set to be completed over the next three years alone, signaling a clear risk of over saturation.
"The emergence of this huge new supply, which equates to around 83 percent of the current organised retail stock, is expected to drive down rental rates right across the market, although aging centres are likely to suffer the most," said Mat Green, head of research & consulting UAE, CBRE Middle East.
Regarding Qatar's office market, the report found that landlords are now facing stiffer competition to secure new tenancies amidst weakening demand fundamentals and a surplus of available office supply.
It said over the past six months, the number of new office requirements, and overall take-up levels, have declined notably, subsequently creating deflationary rental pressures across the market as vacancy rates have started to rise.
The outlook is for a sustained period of rental deflation for both prime and secondary office spaces, with occupancy rates likely to see significant erosion, the report added.
Green said: "Ultimately, the weak performance of the hydrocarbon sector and the knock-on impact on oil and gas and government related occupiers has led to an anemic performance across the market, with overall commercial activities declining, reflecting the subdued business environment."For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.