35,000 new units to come up in Lusail: DTZ official
Lusail Marina District is expected to account for a large number of real estate transactions in the future as it is going to supply around 35,000 new units at relatively low prices, according to a top official of a research firm.
Ed Brookes, the general manager of real estate firm DTZ, said the rental values in Lusail were low now because it was in the initial stages of its transformation.
Qatar would see a 40 percent jump in the estimated office supply between 2018 and 2022, from 4.3 million square metres to 6 million square metres, DTZ said in its fourth quarter market report.
Lusail would be the biggest supplier as DTZ forecasts its supply to jump from 6 percent to 21 percent in the four-year period.
The district also figured prominently in the supply forecast of prime apartments, which has hitherto been a bastion of West Bay and The Pearl-Qatar.
That’s a lot of supply, but where will the demand come from?
According to Brookes, an impending demographic shift — caused by an eventual replacement of blue-collar workers by professionals in the growing non-oil sector — will drive the demand in Qatar’s real estate sector in the long run.
Brookes said a large number of blue-collar workers will leave the country as several infrastructure projects, which began as part of the preparations for the 2022 FIFA World Cup to be hosted in Doha and the Qatar National Vision 2030, are completed.
This demographic shift, along with a buoyant economy, the World Cup and tourism will also fuel the real estate demand, he added.
In its office market overview, DTZ said the demand for small office suites and serviced accommodation will continue to grow as new government initiatives to expand the private sector, including the introduction of the 100 percent foreign ownership law (Law No.1 of 2019), take hold.
In the commercial market, the report said the development of new office buildings in Lusail has added to overall supply. This has resulted in rental levels falling by between 7 and 10 percent in the past year, it added.
In the hospitality sector, overall supply of hotel keys has increased by more than 1,000 rooms in the past year, DTZ noted.
“While this has had an impact on room revenues, occupancy rates have remained relatively stable due to the increase in domestic tourism and the increasing popularity of hotel apartments for ‘long-stay’ guests.”
Johnny Archer, Head of Consulting and Research, DTZ, said, “In the second half of 2018 the fall in residential rents has decelerated as a perception of value has returned to the market. The fall in rental levels has been welcomed in many quarters, after a period of strong growth between 2010 and 2015 had elevated rents to unsustainable levels.”
“Government initiatives to stimulate the private sector over the past two years have been very welcome. These initiatives, together with the completion of Doha’s major infrastructural projects are likely to facilitate growth in the private sector and the diversification of the economy away from oil and gas. This is positive news for the real estate sector; however, oversupply remains a concern in many areas.”
Article Link: Qatar Tribune