Overview of Rental Trends in Qatar’s Retail Shop Market in Q1 2024
Lusail’s average asking rent of available shops contracted by 2% to QAR 195/sqm in the first quarter of the year, while Umm Salal saw a 9% decline from QAR 230/sqm to QAR 209/sqm quarter-on-quarter
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According to an analysis by Qatar’s online real estate marketplace hapondo, the first quarter of 2024 witnessed varying trends in shop rents outside malls across Qatar. Rents in Doha and Lusail seen significant decreases, while Al Rayyan experienced an increase.
Specifically, Doha’s average asking rent for shops declined from QAR 214 per square meter in the previous quarter to QAR 182 per square meter, although this still represents a slight increase from the third quarter’s rates.
In Al Sadd, a prominent commercial district in Doha, rents continued their downward trajectory for the second consecutive quarter, settling at QAR 157 per square meter.
In Lusail, the average asking rent for shop space decreased by 2% to QAR 195 per square meter. Umm Salal, on the other hand, saw a significant 9% reduction in rents, dropping from QAR 230 per square meter to QAR 209 per square meter quarter-on-quarter.
Al Rayyan stood out as the exception, where average asking rents rose for two consecutive quarters, moving from QAR 205 per square meter in the third quarter of 2023 to QAR 228 per square meter in the first quarter of 2024. This increase indicates a renewed confidence in tenant demand within the area.
Ahmad Al-Khanji, Chief Executive Officer of Hapondo explains: “In Q4 last year, we saw the average rents of shops increase in several places in Qatar on the backdrop of two themes. Firstly, landlords were quite optimistic about retail activities due to the upcoming AFC and other events in early 2024. Secondly, we saw our Doha shop listings doubled in number in Q4 and at higher rates – evidence of spaces that were likely rented during the FIFA World Cup and which were either pre-terminated or not renewed a year after.”
Continuing, Ahmad noted: “In Q1, landlords tempered their expectations and therefore we saw adjustments in the average rent of available stock in many places in Qatar.”
Hapondo points out that the decrease in rents is advantageous for tenants. Additionally, the retail sector outside malls boasts a significant amount of fitted space listed, which is beneficial for businesses looking to save on fit-out costs.
Despite the downward pressure on rents, the retail sector in Qatar witnessed notable developments over the last six months, particularly within malls. The opening of Velero Mall in Lusail added new prime retail spaces, while Qatar Tourism launched the Shop Qatar campaign to boost the country’s status as a retail hub.
Furthermore, real estate demand shows promising signs; Doha Festival City recently announced its 500th lease, marking the property as fully rented.
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Villa prices saw particularly strong growth, with capital values increasing by 33.4 percent year-on-year
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Dubai’s real estate market showed strong performance in the second quarter of 2024, with notable increases across the residential, office, and retail sectors, according to a new ValuStrat real estate report for Q2 2024.
Villa prices experienced particularly strong growth, with capital values rising by 33.4 percent year-on-year.
Haider Tuaima, Director and Head of Real Estate Research at ValuStrat said: “The Dubai real estate market has shown impressive growth and resilience in recent months. The ValuStrat Price Index for Residential Capital Values increased by 6.4 percent quarterly and 28.2 percent annually, reaching 178.2 points.
“Despite severe flooding caused by record rainfalls in April, the quick and effective response from developers and authorities helped to control the damage, ensuring that market activity and property valuations remained robust in the subsequent months.”
The office sector also performed well, with the VPI for office capital values surging by 31.7 percent annually and 9.4 percent quarterly, reaching 212.5 points—the highest quarterly increase in a decade.
In the retail sector, Emaar Properties reported 98 percent occupancy in their prime mall assets, while overall mall occupancy stood at 96 percent during the first quarter of 2024. The hospitality sector also saw growth, with total international guests reaching 8.12 million as of May 2024, a 9.9 percent increase compared to the same period last year. Hotel occupancy reached 81 percent, rising by 1.4 percent year-on-year.
Despite these positive indicators, Tuaima added, “The decline in transaction volumes calls for a closer examination of market dynamics as stakeholders navigate this evolving landscape.”
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