DTZ Quarterly Report Qatar Q1 2019: Retail Market Overview
With the opening of 13 new malls in Doha, Al Khor and Al Wakra, organised retail supply in Qatar more than doubled between 2015 and 2018. There is now almost 1.4 million sq m of retail accommodation in 21 purpose-built malls across Qatar.
A significant amount of the organised retail market is dominated by the four largest ‘super-regional’ malls, Doha Festival City, Mall of Qatar, City Centre and Villaggio. These malls currently account for almost half of total supply in Qatar.
Outside of the organised/indoor malls, Qatar’s retail sector features a number of large outdoor developments including Medina Centrale and Porto Arabia on The Pearl Qatar, Souq Waqif and Katara Cultural Village, all of which are dominated by food and beverage outlets.
The recent increase in organised retail supply has transformed the market from being undersupplied to an oversupply scenario, which has had an impact on occupancy rates and revenue metrics. The oversupply has become evident in some new developments, where significant rent-holidays and fit-out contributions are being used to entice new tenants.
Q1 saw the soft opening of Galeries Lafayette at Katara Plaza. Galeries Lafayette is the second internationally renowned luxury department store to open recently in Qatar after the opening of Harvey Nichols in Doha Festival City. Katara Plaza is one of five significant retail developments that are expected to open in 2019, which will increase leasable retail supply by more than 300,000 sq m (Fig 14).
As competition increases, some existing malls, such as City Centre Mall, are undertaking major refurbishment works in order to compete with the new malls. Furthermore, the provision of leisure, entertainment and F&B provisions as well as strong anchors and generous car parking facilities will be vital in sustaining strong footfall.
Over the past few months DTZ have been dealing with a significant increase in the number of F&B operators looking for retail accommodation. The sector has recently been boosted by increasing popularity of home-delivery apps such as Carriage and Talabat.
Prime retail rents are still in the region of QAR 250 – QAR 300 per sq m per month for some of the malls. High street retail and showroom usually command rents of QAR 120 to QAR 160 per sq m per month, however some larger units in suburban locations are now available for less than QAR 100 per sq m per month.
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