May 18, 2020

Quarterly Report Qatar Q1 2020: Residential Market Overview

The residential sector is still active despite Covid19 restrictions

Despite the support measures introduced by the government,
employers in some industries have been forced to furlough staff,
reduce salaries, or in some cases make people redundant.
While no official policy has been introduced on residential rent
relief, some residential landlords have started negotiating with
tenants on deferring rental payments or granting temporary
discounts.

Amenity provisions in residential developments have been
ordered to close, while service staffing levels have been reduced
to a skeleton staff in many cases. These measures, together
with social distancing restrictions, are making it challenging to
lease property. As health and safety concerns increase, leasing
agents are increasingly turning to virtual tours to market their
properties.

Some landlords are extending temporary discounts of 20-50%
to be paid back later, while the others are using a rent-free
incentive – one or two months provided a renewed contract is
signed/extended for up to two years.

Despite the challenges faced due to Covid-19, residential leases
continued to expire, with renewals and re-locations driving
activity. Some residential occupiers are using this time to take
advantage of the recent fall in rents to upgrade their current
accommodation.

A number of new towers were launched in Viva Bahriya in Q1,
including Tower 13, which opened in January and Tower 15,
which opened in March. It is likely that the planned release of
other new towers in Q2 will be delayed, given the ongoing Covid19 restrictions. Abraj Bay Towers, part of Abraj Quartier, are expected to start leasing in June or July of this year.

Rental levels for new, premium quality, furnished apartments in
Viva Bahriya are on average QAR 7,500 and QAR 11,000 per
month for a studio and one-bedroom respectively.

The latest phase of residential apartments has been released in
Msheireb Downtown. One-bedroom apartments are being
offered at QAR 8,500 – 10,500 per month, while two and three bedroom apartments are available to lease from QAR 13,500 per month.

The Supreme Committee for Delivery & Legacy (SC) announced
in Q1 that individual landlords or companies who own multiple,
adjacent, fully furnished units within villa compounds, apartment
blocks or mixed-use schemes would potentially be able to avail
of a five-year lease with SC with a start date of either January
01st 2022 or August 01st 2021. This is likely to prove attractive
to many landlords given the pipeline of new supply. The SC has
set out strict requirements relating to quality and specification,
which should help to improve overall standards when these
properties return to the market after the World Cup.

Cushman & Wakefield Quarterly Report Qatar Q1 2020

 

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