Quarterly Report Qatar Q4 2021: Retail Market Overview
Strong increase in retail spending reported in Doha’s main malls in Q4
Qatar’s supply of organised indoor retail accommodation exceeded 1.5 million sq m of gross leasable area in 2021. The most recent retail destinations include Abu Sidra Mall and The Galleria, both of which opened partially but are yet to reach full capacity. The current supply of organised retail space in Qatar represents an increase of more than 100% in six years.
While there has been an increase in leasing activity and lease renewals in recent months, the impact of the COVID-19 pandemic is evident across the retail market in Doha. A survey undertaken by Cushman and Wakefield in November 2021 showed that more than 600 retail units within Doha’s 20 largest retail malls were vacant – representing almost 20%. While some malls continue to attract strong footfall and maintain full occupancy, the performance of a number of malls have been significantly impacted by the increasing competition and the challenging retail environment. A two-tiered retail market is becoming increasingly evident with the majority of tenant demand now focussed on a handful of strong retail locations.
The second half of 2021 saw an increase in leasing activity in City Centre Mall, Doha Festival City, and Mall of Qatar. Elsewhere, there has been strong take-up in Place Vendome and Commercial Boulevard in Lusail, both of which will open in 2022.
Place Vendome will represent Qatar’s largest retail development and will feature both luxury brands and high-street retail – including many brands that are new to Qatar. The retail component of Doha Oasis, on Al Khaleej Street in Central Doha, will open in the coming months and be the home of the prestigious fashion department store Printemps, who will occupy three floors of retail space overlooking the Doha Quest indoor theme park.
There was strong growth in retail performance in many of Qatar’s major malls in Q4. It has been reported to Cushman and Wakefield that retail spending in these developments in December (prior to the outbreak of Omicron) was up by between 10% and 20% on the same month in 2019. Retail malls have also indicated there has been a recovery in supply chains for retail stock; however, problems remain in securing building materials, which has delayed the opening of a number of new stores in recent months.
Line-unit rents in Doha’s busier malls are now typically between QAR 200 and QAR 250 per sq m per month, although we understand premium rents are being achieved in Place Vendome. While rental incentives are being phased out in busier malls, 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.