Quarterly Report Qatar Q4 2023: Retail Market Overview

Increasing disparity in performance between Doha’s largest retail destinations and older malls

Valero Mall became an addition to Doha’s retail landscape in December, providing 24-hour shopping in Lusail’s Marina District. The largest addition to the retail and F&B sector in 2023 was West Walk – a mixed-use development of restaurants and retail outlets in Al Waab.

Cushman and Wakefield’s research indicates that there is more than 1.7 million sq m of leasable floor space in Qatar’s main organised retail malls (20,000 sq m +). There is also more than 400,000 sq m of leasable space in open air retail/F&B destinations, including The Pearl, Souq Waqif, Souq Al Wakra, Msheireb Downtown, Katara, Doha Port, Lusail Boulevard, and West Walk.

Some of Qatar’s main malls have indicated that footfall and spending have remained consistent this year. The increase in supply over recent years has, however, seen both footfall and occupancy drop in some of Doha’s older malls, as properties compete for a finite number of retailers and F&B operators. While there is an increasing disparity between malls, Cushman and Wakefield estimate that there is now an overall vacancy rate of more than 20% (by unit) in Qatar’s 20 largest malls.

Retail mall managers have reported the noticeable impact that international geo-politics has had in Q4. A number of international brands have seen a downturn in trade due to the war in Gaza. It is unclear what impact geo-politics and associated consumer behaviour will have on Qatar’s retail market in 2024.

In an increasingly competitive market, retail experts in Qatar are emphasising the requirement to expand the entertainment and leisure provisions in malls to attract shoppers. With a surplus of accommodation in many locations, many vacant areas, often in upper floor locations, are being considered for new entertainment concepts. Over the past 12 months, some of these locations have been utilized by gyms, fitness clubs and clinics, taking large floorplates at discounted rents.

While there has been demand for retail space in the busier malls, a number of retailers have closed their doors in recent months due to a challenging trading environment. Outside of prime locations, rent-free incentives, fit-out contributions, and turnover rent arrangements are all on offer from most developments to entice new retail tenants.

Headline rents for line units in Doha’s prime malls remain between QAR 200 and QAR 250 per sq m per month, exclusive of service charges. Line unit rents in many secondary malls is often below QAR 200 per sq m per month. Anchor tenants typically pay rents of between QAR 60 and QAR 150 per sq m per month.

Retail showrooms lease for between QAR 80 and QAR 150 per sq m per month, while convenience retail outlets in secondary locations such as strip malls usually lease for between QAR 5,000 and QAR 10,000 per month, depending on the unit size.

Cushman & Wakefield Quarterly Report Qatar Q4 2023

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