Satyendra Pathak
Doha
Qatar’s real estate sector started 2022 on a positive note with rising rental rates in the residential, retail and warehouse sectors, leading regional consulting group ValuStrat has said in a report published recently.
According to the report, country-wide occupancy of the residential sector expanded to 80 percent, propelled by short-long term leases by the Supreme Committee for World Cup 2022 and a pick-up in demand from companies looking for staff accommodation.
Falling vacancy has motivated quarterly growth of 3.3 percent in the median residential asking rent to QR9,000 per month, it said.
"Spike in leasing activity and positive expectation associated with hosting World Cup 2022 has increased rents and capital values this quarter. Apartments are performing better compared to villas in the rental and sales market. Rent and capital values are projected to grow throughout the year,” the report said.
"We expect the market to continue to recover during 2022. Considering the projections for macroeconomic and microeconomic indicators such as GDP, population, hydrocarbons performance and supply pipeline, the medium-term outlook for all asset classes except offices is optimistic,” the report said.
All sectors except the significantly oversupplied office segment performed well ahead of hosting World Cup 2022, the report said.
Post FIFA 2022, ValuStrat said, "We expect the real estate market to adjust to a new trajectory.”
According to the report, the average capital value of residential property stood at QR7,150 per sq m with apartments at QR10,312 per sq m and villas QR5,574 per sq m.
Apartments in Lusail experienced the highest quarterly appreciation of 5.3 percent, it said.
Capital values of villas in Al Dafna and West Bay Lagoon increased by 4 percent and 14 percent quarter-on-quarter respectively. The remaining clusters experienced no change, or a marginal decline, in sales values.
Housing stock in Qatar totalled 308,000 units at the end of the first quarter this year with the addition of 700 units during the quarter, it said. Projects handed over were situated in Lusail (Fox Hill) and The Pearl. Approximately 13,800 units are in the pipeline for the remainder of this year.
Commenting on the Qatar’s hotel sector, the report said that the first quarter added 500 keys to total hotel stock. Approximately 12,000 rooms are in the pipeline for 2022. Assuming no construction delays, the report said, total supply might exceed 42,000 keys by end of the year.
Qatar removed most travel restrictions leading to a total of 315,831 foreign arrivals during the first quarter of 2022, increasing by 691 percent as compared to the first quarter of 2021. However, average occupancy was 58 percent, down by 5 year year-on-year. On the other hand, the Average Daily Rate (ADR) stood at QR459 and continued to grow, rising by 14 percent over one year.
ADR and occupancy are projected to expand substantially during the second half of 2022, when Qatar is hosting the FIFA World Cup 2022. Government of Qatar has announced that 1.5 million visitors are projected to attend the sporting event and 130,000 rooms will be available to host them, the report said.