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Satyendra Pathak
Doha
Qatar’s real estate sector is showing signs of stability and the market is expected to sustain positive momentum in the second half of 2021, KPMG Qatar has said in a report released on Wednesday.
According to KPMG’s ‘Qatar Real Estate Rental Index Q1 2016 – Q2 2021’ report that tracks quarterly changes in the real estate rental market covering three core asset categories, the revival in Qatar’s real estate sector is due to the successful COVID-19 vaccination efforts coupled with the government measures to support the economy.
The three core asset categories of the report include KPMG Office Rental Index (K-ORI), KPMG Residential Rental Index (K-RRI) and KPMG Mall Rental Index (K-MRI).
In a statement as part of the report, KPMG Qatar Infrastructure, Financing and Real Estate Valuations Associate Director and Head Sayantan Pande said, “We have started experiencing increased interest from large regional developers in the Qatar market, reconfirming our view that the market remains attractive and will return to normal soon.” he said.
The initial two quarters of 2021 witnessed a flattening of the curve on the rental index. This is a positive sign for a market that has been under continuous southward pressure over the past few years.
“In the residential sector, we witnessed signs of recovery. There was an active movement of tenants in the mid to high-end category. In commercial office space, the demand originating from private occupiers remained low. Serviced office suites continue to be in demand by small enterprises, businesses and startups. In retail, after a period of lack of activity, the sector experienced a possible rebound in demand from both existing and new brands willing to enter the Qatar market,” Pande said.
The research-based report showed that office rentals in the central business district are witnessing promising signs of stability.
“With the uptick in the economic activity, we can expect a possible recovery over the short to middle term. After witnessing a drop of 8.4 percent during the last two quarters of 2020, the rentals for the commercial office segment have experienced significant improvement with just a one percent decline on the rental index during the first quarter and the second quarter of 2021,” the report said.
“As per our interactions with the industry stakeholders, the market continues to remain tenant-favoured with relatively subdued demand and geared towards requirements of smaller office spaces with fitted-out options. Large shell and core requirements were relatively less, particularly those originating from the private sector. Interestingly, the demand for co-working spaces and serviced office suites continues to show improvement, with many small and emerging enterprises opting for reduced real estate costs through shared spaces,” the report said.
For the residential rental market, the first quarter and the second quarter of 2021 exhibited stable leasing activity resulting in a marginal decline of 0.4 percent on the rental index as compared to 3.7 percent as witnessed during the third quarter and fourth quarter of 2020.
According to the research, there has been a marked rise in tenant movement over the first two quarters of 2021. The second quarter experienced signs of recovery on the rental index, which is a positive for the sector that has witnessed a constant decline since the beginning of 2016.
This positive trend is driven by increased affordability in the mid and high-end categories coupled with increasing demand for larger living spaces, convenient access to recreational amenities, and private outdoor spaces.
“As per our research, centrally located districts continue to be popular with tenant’s keen on upscale properties,” it said.
On the organised retail mall front, the report said, changing the momentum experienced over the last year, the first quarter and the second quarter of 2021 registered improved leasing activity with several new and existing brands occupying organised retail spaces in the leading malls across Qatar.
“The organised retail mall segment registered a relatively softer decline on the rental index by 2.9 percent compared to the material drop of 9.6 percent experienced primarily due to the onset of the pandemic during the third quarter and the fourth quarter of 2020,” it said.
KPMG Qatar Strategy and Real Estate Advisory Director and Head Anurag Gupta said, “The first quarter and the second quarter of 2021 experienced a shift in the momentum with monthly rentals experiencing a relatively softer decline. This could be attributed to landlords offering value for money products along with other external factors such as government efforts in widespread vaccination, expected relaxation in employment-related restrictions and gradual improvement in the overall economic activity.”
Doha
Qatar’s real estate sector is showing signs of stability and the market is expected to sustain positive momentum in the second half of 2021, KPMG Qatar has said in a report released on Wednesday.
According to KPMG’s ‘Qatar Real Estate Rental Index Q1 2016 – Q2 2021’ report that tracks quarterly changes in the real estate rental market covering three core asset categories, the revival in Qatar’s real estate sector is due to the successful COVID-19 vaccination efforts coupled with the government measures to support the economy.
The three core asset categories of the report include KPMG Office Rental Index (K-ORI), KPMG Residential Rental Index (K-RRI) and KPMG Mall Rental Index (K-MRI).
In a statement as part of the report, KPMG Qatar Infrastructure, Financing and Real Estate Valuations Associate Director and Head Sayantan Pande said, “We have started experiencing increased interest from large regional developers in the Qatar market, reconfirming our view that the market remains attractive and will return to normal soon.” he said.
The initial two quarters of 2021 witnessed a flattening of the curve on the rental index. This is a positive sign for a market that has been under continuous southward pressure over the past few years.
“In the residential sector, we witnessed signs of recovery. There was an active movement of tenants in the mid to high-end category. In commercial office space, the demand originating from private occupiers remained low. Serviced office suites continue to be in demand by small enterprises, businesses and startups. In retail, after a period of lack of activity, the sector experienced a possible rebound in demand from both existing and new brands willing to enter the Qatar market,” Pande said.
The research-based report showed that office rentals in the central business district are witnessing promising signs of stability.
“With the uptick in the economic activity, we can expect a possible recovery over the short to middle term. After witnessing a drop of 8.4 percent during the last two quarters of 2020, the rentals for the commercial office segment have experienced significant improvement with just a one percent decline on the rental index during the first quarter and the second quarter of 2021,” the report said.
“As per our interactions with the industry stakeholders, the market continues to remain tenant-favoured with relatively subdued demand and geared towards requirements of smaller office spaces with fitted-out options. Large shell and core requirements were relatively less, particularly those originating from the private sector. Interestingly, the demand for co-working spaces and serviced office suites continues to show improvement, with many small and emerging enterprises opting for reduced real estate costs through shared spaces,” the report said.
For the residential rental market, the first quarter and the second quarter of 2021 exhibited stable leasing activity resulting in a marginal decline of 0.4 percent on the rental index as compared to 3.7 percent as witnessed during the third quarter and fourth quarter of 2020.
According to the research, there has been a marked rise in tenant movement over the first two quarters of 2021. The second quarter experienced signs of recovery on the rental index, which is a positive for the sector that has witnessed a constant decline since the beginning of 2016.
This positive trend is driven by increased affordability in the mid and high-end categories coupled with increasing demand for larger living spaces, convenient access to recreational amenities, and private outdoor spaces.
“As per our research, centrally located districts continue to be popular with tenant’s keen on upscale properties,” it said.
On the organised retail mall front, the report said, changing the momentum experienced over the last year, the first quarter and the second quarter of 2021 registered improved leasing activity with several new and existing brands occupying organised retail spaces in the leading malls across Qatar.
“The organised retail mall segment registered a relatively softer decline on the rental index by 2.9 percent compared to the material drop of 9.6 percent experienced primarily due to the onset of the pandemic during the third quarter and the fourth quarter of 2020,” it said.
KPMG Qatar Strategy and Real Estate Advisory Director and Head Anurag Gupta said, “The first quarter and the second quarter of 2021 experienced a shift in the momentum with monthly rentals experiencing a relatively softer decline. This could be attributed to landlords offering value for money products along with other external factors such as government efforts in widespread vaccination, expected relaxation in employment-related restrictions and gradual improvement in the overall economic activity.”
