Quarterly Report Qatar Q1 2022: Office Market Overview
Office Supply in Qatar is now over 5 million sqm, with Grade A space accounting for more than 50% Cushman and Wakefield estimate that the supply of purpose-built office accommodation in Qatar has now reached approximately 5.3 million sqm. West Bay accounts for the largest supply of offices by district, with approx. 1.8 million sqm of leasable space now completed.
Qatar Energy’s new headquarters at Abdullah Bin Hamad AlAttiyah district represents the largest single office development, providing more than 230,000 sqm. Qatar Energy and affiliated companies will occupy the development entirely rather than being available to the open market.
We expect new office construction to slow post World Cup until the existing and new supply is absorbed. Major projects under development include Commercial Boulevard and Lusail Towers in the Downtown Lusail area. On completion of these developments, office supply in Lusail will extend to more than one million sqm of leasable accommodation.
Several leases have been agreed in Q1 by oil and gas sector companies in both Lusail and West Bay. These include deals for office expansions, re-locations and agreements with companies new to the Qatar market. In recent months, there have also been acquisitions by government ministries; however, these have primarily been for re-location purposes. It is likely that older buildings currently occupied by these bodies will be vacated in the coming year.
There has also been activity in the financial and professional services sectors, with acquisitions of between 1,000 and 2,000sqm agreed in Q1. This is partly in response to government initiatives to promote the financial services sector. Office rents remain relatively stable, having fallen significantly between 2015 and 2021. Demand for offices is almost exclusively for Grade A space, most notably in Lusail. Vacant office space in Doha’s traditional office areas of C-Ring Road, the city centre and Old Salata continue to feel the impact of increased supply, with extended vacancy voids now common.
Prime rents in West Bay range from QAR 100 to QAR 130 per sqm per month exclusive of service charges. Office spaces leased as ‘shell and core’ can be secured for less than QAR 80per sqm per month. Office suites in Lusail command rent of between QAR 80 and QAR 120 per sqm per month.
Office rents in the districts such as Old Salata and Al Sadd now range from QAR 50 to QAR 80 per sq m per month, with significant incentives available to attract tenants