Quarterly Report Qatar Q2 2024: Retail Market Overview

Strong demand for prime retail locations, despite the market experiencing a general oversupply

The increase in tourists to Qatar contributed to a reported increase in footfall throughout Qatar’s main malls in Q1, and this has reportedly been maintained between April and June. A number of mall managers have also reported an increase in spending in 2024 compared to 2023.

No significant new retail developments were launched in Q2; however, it has been confirmed to Cushman and Wakefield that Doha Mall will open fully in September, following the opening of its anchor tenant Lulu in Q1.

Organised retail supply in Qatar’s malls is approx. 1.6 million sq m. This supply is supplemented by more than 400,000 sq m of leasable space in ‘open-air’ retail/F&B destinations, which includes The Pearl, Souq Waqif, Souq Al Wakra, Msheireb Downtown, Katara, Doha Port, and Lusail Boulevard.

As with the office real estate market, occupancy rates differ between some of Qatar’s prime developments and the wider market. In Q2, Doha Festival City joined Villaggio Mall in reporting full occupancy after leases were agreed on the remaining available units. Place Vendome continues to attract new retailers with strong pent-up demand for ground floor units and from luxury retailers as the project increases its footfall.

In the wider retail market, the overall increase in supply in the past five years has led to a number of malls struggling to attract footfall, with vacancy rates growing. Cushman and Wakefield estimate that approx. 20% of retail units within organised malls are currently vacant.

Similarly, open air developments, that are exposed to reduced footfall over summer months are increasingly allowing more flexible lease terms and rental incentives to attract and retain tenants in an increasingly competitive market.

Standard line units of approx. 120 – 250 sq m in Doha’s main malls typically rent for between QAR 220 and QAR 280 per sq m per month. Smaller sized outlets in prime locations usually command between QAR 300 and QAR 400 per sq m per month. Malls that have seen footfall reduce following the opening of Doha’s super-regional malls, have largely reduced their rent to below QAR 200 per sq m per month for line units.

Outside of the organised retail malls, retail showrooms are typically available to lease for between QAR 80 and QAR 140 per sq m per month. Restaurants and cafés in some of Qatar’s most popular outdoor destinations, typically generate rental incomes between QAR 130 and QAR 180 per sq m per month. Small convenience retail outlets in secondary locations such as strip-malls are increasingly leased based on a sustainable rent of between QAR 4,000 and QAR 10,000 per month, depending on the unit size.

Outside of the organised retail malls, retail showrooms are typically available to lease for between QAR 80 and QAR 140 per sq m per month. Restaurants and cafés in some of Qatar’s most popular outdoor destinations, typically generate rental incomes between QAR 130 and QAR 180 per sq m per month.

Small convenience retail outlets in secondary locations such as strip-malls are increasingly leased based on a sustainable rent of between QAR 4,000 and QAR 10,000 per month, depending on the unit size.

Cushman & Wakefield Quarterly Report Qatar Q2 2024

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