Quarterly Report Qatar Q4 2022: Office Market Overview
New office leases and renewals start to reflect the lower rents that are now available to tenants. The increase in office activity from the first three quarters continued in Q4, with a notable increase in new enquiries in 2022 from the private sector.
While there were a number of new entrants to the Qatar market this year, the majority of new office enquiries to Cushman and Wakefield in 2022 have been triggered by lease expiries or tenant break options. The fall in office rents over the past five years has spurred companies in Qatar to seek alternative accommodation, which is now available at lower rents – or renegotiate the terms of expiring leases at substantially lower rents than were committed to between 2015 and 2020.
There has also been an increase in tenants seeking larger office units, taking advantage of the more affordable terms now available. The recent expansion in the hydrocarbon sector has been behind a recent office acquisition of more than 7,000 sq m and two further lettings in excess of 3,000 sq m in H2.
2022 saw a number of government and semi-government agencies announce their intention to relocate to buildings that are under construction in downtown Lusail. While this will ultimately lead to buildings in other locations being vacated, it highlights an increasing trend in office occupiers moving to Lusail.
Organisations such as Qatar Financial Centre, and the Qatar Free Zone Authority continue to drive demand for offices in the private sector. QFZA-designated office accommodation will soon be available to lease to QFZA companies outside of Ras Bufontas, as office buildings within that Free Zone are reaching capacity. An agreement is also in place for QFZA-registered companies to occupy offices in Msheireb Downtown to accommodate growing demand from an organisation with more than 300 registered companies.
QFC currently has more than 60 designated buildings across Doha housing the 1,400 QFC registered companies. This number is also expected to grow over the coming years.
The supply of purpose-built office accommodation in Qatar has now reached approximately 5.3 million sq m. The Al Dafna/West Bay district has the largest concentration of supply with approx. 1.8 million sq m of gross leasable area, while the expanding supply of office accommodation in Lusail has surpassed 800,000 sq m.
Grade A stock is now typically available to lease from between QAR 100 to QAR 120 per sqm per month exclusive of service charges. Office spaces leased as ‘shell and core’ can be secured for QAR 60 per sq m per month in some of Doha’s main office districts.
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