Rents for office and retail space in Qatar are expected to fall this year as a result of a stagnant market and the global economic downturn, it was announced on Saturday.
A report by Global Investment House (GIH) predicts that the adverse impact of a slowdown in demand and the already sizable supply of commercial space in Doha may see rents squeezed until 2011.
“We believe the office and retail segments will have sizeable supply this year. Several units in these segments will come online in 2009, easing demand and leading to a drop in rents,” the report said, according to Qatar daily Gulf Times.
Over the years, Doha’s office market has experienced "significant growth" with demand for office space being driven by global oil and gas companies, the banking and financial services sector and government ministries and other agencies, it added.
Currently average rent in a new CBD office is QR325 sqm ($88.50) - a significant increase on the QR100 to QR125 per sqm per month asking price in 2005.
However, office rents have started stabilising for primary grade office space, GIH said.
Meanwhile, in the retail sector space in Doha is expected to increase from 700,000 sqm, to about 1,130,000 sqm, as several projects are expected to come complete over the next five to six years. Rentals have followed an upward trend for the last three years supported by the limited available shopping space with average shopping mall rents ranging from between $495 per sqm to a high of $925 sqm in 2008.
However, this upward trend is expected to tail off in 2009, GIH said.For all the latest business 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.
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