Doha: With commercial rents becoming affordable the demand for office space supply has increased significantly. The supply of purpose-built office accommodation in Qatar has now reached approximately 5.3 million square metres (sqm), said Cushman and Wakefield in its second quarter (Q2) report, recently.
As FIFA World Cup Qatar 2022 is approaching, several companies are opening branches in the country which is boosting the demand for office space supply. “As rents have become more affordable, demand for offices is increasingly for Grade A accommodation, most notably in Lusail. The Al Dafna/West Bay district has the largest concentration of supply with approximately 1.8 million sqm of gross leasable area in more than 70 buildings,” the consultancy firm said.
“QatarEnergy’s new headquarters in West Bay has been opening on a phased basis throughout 2022. It comprises more than 200,000 sqm of office space and will house QatarEnergy and affiliated companies. The relocation of QatarEnergy from various locations throughout Doha to the new HQ in West Bay is likely to result in an increase in vacancy rates in secondary locations,” it added.
The Q2 Real Estate Market Review report stated that the office rents remain stable after an extended period of decline. The office market in Qatar has been relatively subdued in recent months, with most leasing activity involving small suites of less than 200sqm. Having fallen by more than 50 percent between 2015 and 2021, office rents have largely plateaued with the highest rents in the market being sought in West Bay and Msheireb Downtown. There has been very limited demand for shell-and-core office space over the past three years, and this type of accommodation is available throughout Doha with rent free incentives to subsidise tenant fit-out costs.
Prime rents in West Bay range from QR100 to QR120 per sqm per month exclusive of service charges. Office spaces leased as ‘shell and core’ can be secured for as little as QR60 per sqm per month in some areas of central Doha, where vacancy rates are climbing. Office suites in Lusail typically command rent of between QR75 and QR100 per sqm per month, the report further said.