Quarterly Report Qatar Q2 2022: Retail Market Overview
Place Vendome, Qatar’s third super-regional mall, opened its doors in April.
The most notable development in the retail real estate market in Qatar in Q2 was the opening of Place Vendome in Lusail in April. With a reported GLA of 230,000 sq m, Place Vendome represents the third Super-Regional mall in Qatar after Mall of Qatar and Doha Festival City and is the first major mall (50,000 sq m + GLA) to open in Qatar since Tawar Mall in 2018.
Overall supply of organised retail accommodation within malls in in Qatar has now reached 1.7 million sq m. This supply excludes hypermarkets and supermarkets with ancillary convenience stores. New supply reflects an increase of more 160% since 2015, and has created an oversupply, which has become increasingly evident since 2018.
Occupancy rates in the 19 largest malls in Qatar has dropped to approx. 80%. A two-tiered market has emerged whereby a selection of malls attract high footfall and are maintaining rental levels and occupancy, with other malls struggling to attract the same level of tenants and shoppers.
Despite increasing pressure on occupancy rates, new developments have significantly increased the quality of retail real estate on offer in Qatar, with new malls focussing on higher quality restaurants, entertainment, and leisure to complement their retail offering.
Generous rent free incentives, fit-out contributions and turnover rent arrangements are on offer in many developments to attract tenants and build occupancy. Some of the busier malls have phased out rental incentives as footfall and retail spending recovers after the lifting of most COVID-19 related restrictions.
Global supply chain issues in obtaining building materials continue to delay the opening of new retail units in Qatar. New retail/F&B supply expected to open in Qatar in 2022 includes Doha Oasis (Printemps), Giardino Mall, 04 Mall, Waddan Mall, Commercial Boulevard and the MENA District in Doha Port.
Headline rents for line units in Doha’s busier malls are typically between QAR 200 and QAR 250 per sq m per month. Rental incentives have been phased out to a large degree in Doha’s busier malls; however, significant discounts and turnover rents are still available in malls with higher vacancy as landlords look to increase occupancy.
Outside of the main retail malls, high street showrooms, local convenience retail, and F&B destinations are typically available to lease for between QAR 90 and QAR 150 per sq m per month