Real estate trends in Qatar: Freehold Zones, work from home solutions, FIFA World Cup to dominate in 2022
Cityscape Intelligence’s Teneshia Naidoo sits down with Johnny Archer, Partner, Head of Research & Consulting, Cushman & Wakefield, Qatar to discuss what to expect from Qatar’s real estate market over the next year and what impact the FIFA World Cup will have on the property sector.
Can you provide an overview of the Qatari real estate market?
The residential real estate market has seen a surge in activity in 2022, which can be explained by the additional demand being generated by the World Cup. We are seeing evidence of rental increases in Qatar for the first time since 2015; however, this increase is likely to be temporary as demand is expected to subside in 2023. The commercial market has also seen an increase in activity, particularly in Lusail, however rental levels are still impacted by a general oversupply in the market.
What are the top trends we can expect to emerge this year?
We expect to see further upward pressure in apartment rents as availability become scarcer ahead of the World Cup. Landlords are increasingly likely to demand 2-year contracts to capitalise on the rental inflation and lessen the impact of reduced demand in 2023.
What would you say are some of the drivers for property investment in Qatar in 2022?
The main driver for property investment recently has been the increase in ‘Freehold Zones’ under Law No. 16 of 2018, which allows non-Qatari ownership of real estate in ten districts. The new law grants residency rights for property owners, which is likely to continue to drive demand for apartments in Lusail, West Bay and The Pearl-Qatar.
Over the last two years, the office landscape shifted towards hybrid, what has this meant for the office sector in Qatar? What can we expect over the next year?
The Work From Home solution helped the corporate world deal with the COVID-19 epidemic. Going forward, we believe employers will be more open to flexible work solutions; however, we are already seeing an increasing number of employers insist on a full return to the office in 2022. As we move beyond the lockdown restrictions, companies are now looking to re-activate their searches for office accommodation – which will help office demand levels recover in the short to medium term.
Qatar will play hosts to the biggest sporting event in the world, what are Cushman & Wakefield’s predictions post-World Cup for the country’s real estate market?
Qatar’s real estate market has been dominated in recent years by the upcoming FIFA World Cup, with an unprecedented volume of apartments, hotels, villas, retail malls and office buildings developed between 2010 and 2022. Construction will pause in the second half of 2022 as Qatar prepares for the event. Thereafter, we expect to see a significant slow-down in new project commencements until the supply is absorbed and rental levels increase.
Can you paint a picture of what international investment looks like in Qatar? Who are the active spenders and what asset classes are they looking into?
International investment in Qatar’s real estate market is currently dominated by individual apartment purchasers taking advantage of the residency rights offered under Law No.16 of 2018. Large institutional investors still have a very small foothold in the market, which is dominated by local purchasers.
How is ESG gaining a foothold in Qatar real estate? Are we seeing it being incorporated into real estate portfolios?
ESG is playing an increasing role in real estate development in Qatar. Msheireb Downtown has been developed to be a global leader in sustainability with each building gaining a gold or platinum LEED certification. Minimum environmental standards and LEED certifications are also required in the construction of new buildings in Lusail. The increasing demand for energy efficiency in real estate is likely to see ESG play a greater role in any future development proposals throughout the country.
Johnny Archer will be a speaker at this year’s Cityscape Qatar Talks, taking place from June 20th – 22nd at the Doha Exhibition and Convention.