Q1 REAL ESTATE MARKET REVIEW

PROPERTY TIMES

QATAR Q1 2020

cushmanwakefield.com PROPERTY TIMES 1

PROPERTY TIMES

Q1 Real Estate Market Review

Qatar Q1 2020

• In March 2020, the global Coronavirus (Covid-19) pandemic saw economies around the world take significant measures to stop the spread of the virus. On March 15th,the State of Qatar introduced lockdown measures with simultaneous support packages for business.

• Qatar Central Bank (QCB) put in place mechanisms to encourage banks to postpone loan instalments and obligations of the private sector with a grace period of six months. Government funds have been instructed to increase investments in the stock market by QAR 10bn.

• HH the Amir Sheikh Tamim bin Hamad Al-Thani introduced directives to provide financial and economic incentives, amounting to QAR 75 billion, for the private sector. HE the Prime Minister and Minister of Interior Sheikh Khalid bin Khalifa bin Abdulaziz Al -Thani, allocated guarantees to local banks at an amount of QAR 3 billion. The program is a 100% guarantee scheme of the Government of Qatar to help mitigate Covid-19 impacts by relieving the most critical short-term payments private sector employers will face during the next three months as it includes staff payroll-salaries and rental fees.

• Mesaieed and Manateq’s warehouse and logistics tenants have been exempted from rent for six months effective March 15th, while Bu Fessela and Bu Sulbawarehousing and logistics park tenants were exempted from rent for three months starting from March.

• Several sectors have been exempted from electricity and water charges for six months. These include retail, hospitality, and tourism.

• QFC is now exploring ways for a QFC entity, whether Qatari, foreign, or shared ownership to own and dispose of real estate in Qatar. Currently, real estate ownership is governed by the provision of the Law No. 16 of 2018 on the Regulating Ownership and Use of Real Estate by Non-Qataris (‘Ownership Law).

Figure 1

No. of real estate transactions in Qatar, Dec 2014 – Feb 2020

Source: PSA

31/03/2020

ContentsEconomic Overview 2Office Market Overview 3Residential Market Overview 4Hospitality Market Overview 5Retail Market Overview 6

AuthorJohnny ArcherDirectorConsulting & Research, Qatar+974 44837395johnny.archer@cushwake.qa

ContactsEdd BrookesHead of Middle East+974 44837395edd.brookes@cushwake.qa

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cushmanwakefield.com / 1II / Cushman & Wakefield

cushmanwakefield.com PROPERTY TIMES 1

PROPERTY TIMES

Q1 Real Estate Market Review

Qatar Q1 2020

• In March 2020, the global Coronavirus (Covid-19) pandemic saw economies around the world take significant measures to stop the spread of the virus. On March 15th,the State of Qatar introduced lockdown measures with simultaneous support packages for business.

• Qatar Central Bank (QCB) put in place mechanisms to encourage banks to postpone loan instalments and obligations of the private sector with a grace period of six months. Government funds have been instructed to increase investments in the stock market by QAR 10bn.

• HH the Amir Sheikh Tamim bin Hamad Al-Thani introduced directives to provide financial and economic incentives, amounting to QAR 75 billion, for the private sector. HE the Prime Minister and Minister of Interior Sheikh Khalid bin Khalifa bin Abdulaziz Al -Thani, allocated guarantees to local banks at an amount of QAR 3 billion. The program is a 100% guarantee scheme of the Government of Qatar to help mitigate Covid-19 impacts by relieving the most critical short-term payments private sector employers will face during the next three months as it includes staff payroll-salaries and rental fees.

• Mesaieed and Manateq’s warehouse and logistics tenants have been exempted from rent for six months effective March 15th, while Bu Fessela and Bu Sulbawarehousing and logistics park tenants were exempted from rent for three months starting from March.

• Several sectors have been exempted from electricity and water charges for six months. These include retail, hospitality, and tourism.

• QFC is now exploring ways for a QFC entity, whether Qatari, foreign, or shared ownership to own and dispose of real estate in Qatar. Currently, real estate ownership is governed by the provision of the Law No. 16 of 2018 on the Regulating Ownership and Use of Real Estate by Non-Qataris (‘Ownership Law).

Figure 1

No. of real estate transactions in Qatar, Dec 2014 – Feb 2020

Source: PSA

31/03/2020

ContentsEconomic Overview 2Office Market Overview 3Residential Market Overview 4Hospitality Market Overview 5Retail Market Overview 6

AuthorJohnny ArcherDirectorConsulting & Research, Qatar+974 44837395johnny.archer@cushwake.qa

ContactsEdd BrookesHead of Middle East+974 44837395edd.brookes@cushwake.qa

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cushmanwakefield.com / 1II / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 3

Office Market OverviewThe commercial office market is yet to be fully affected by Covid-19

Except for a reduction in the number of new enquiries for office accommodation since mid-March, the initial impact of Covid-19on the commercial office market has been limited to date. That is mainly due to activity in the sector being driven by lease events such as lease expiries, which still need to be acted upon. Occupier relocation projects that started before the Covid-19 measures were introduced are progressing as planned, though in some cases they are subject to some delays. In general, the lockdown has not affected the commercial office market as much as the retail sector. Tenants are still able to access their offices, subject to government guidelines of reduced staffing and hours; therefore, there have not been multiple announcements by landlords on rent relief.

Some prospective new office occupiers are now considering serviced office options instead of conventional officeaccommodation, as a short-term measure, while market uncertainty prevails.

The total supply in the office market is now approx. 4.9 million sqm, with the prime sector accounting for 49% of this space. The vacancy rate has increased to over 30% in prime office districts, largely due to the increase in new supply in Lusail and Msheireb over the past 12 months.

Lusail’s infrastructure is now largely complete. In the Marina District, Y Tower and Union Trust Tower were completed in Q1,bringing the total supply in the district to just under 600,000 sqm.While some landlords are looking to secure a single occupier, smaller fitted office suites are increasingly available to lease in Lusail – which have not always been readily available in West Bay.

Q1 saw the arrival of new office supply in Energy City increase the total stock to just under 60,000 sqm, of which approximately 80% of which has been leased.

Shell and core space in Marina District is typically available forbetween QAR 80 and QAR 120 per sqm per month exclusive ofservice charges. Fitted suites are being offered at rents from QAR 120 per sqm per month, with a service charge and chilled water also payable.

Google Cloud and Microsoft Azure announced the launch of a proposed data centre projects in Doha under the Qatar Free Zone Authority (QFZA), which means committing significant investment to the country. Qatar has strict national data sovereignty regulations in line with the other GCC countries and it is hoped that this high-profile move will allow the public sector and private companies, especially financial services, to become more efficient compared to their global peers. Apart from theindirect effect of attracting foreign investment, this initiative should boost the IT sector and may result in a higher demand for office space.

Figure 5

Estimated office supply, Doha 2013 – Q1 2020 (million sqm)

Source: Cushman & Wakefield

Figure 6

Grade A office supply (million sqm) and availability (%), 2013 – Q1 2020

Source: Cushman & Wakefield

Figure 7

Office rents by district (QAR/sqm/month), 2013 – Q1 2020

Source: Cushman & Wakefield

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West Bay - Prime West Bay - AverageLusail - Average Lusail - PrimeC/D Ring Road and Al Sadd

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 2

Economic OverviewGDP growth is expected to be zero in 2020 due to the decrease in oil and gas prices

Oxford Economics forecasts a second consecutive year of stagnation in growth in 2020 as a result of decreased global demand for oil and gas because of coronavirus. Ongoing investment in the run-up to 2022 FIFA World Cup had been expected to boost growth to over 3% in 2021; however, this is less certain given the unknown duration of the Covid-19 pandemic, the associated mitigation measures, and the knock-on effects.

Qatar has announced an economic support package for the private sector worth approximately 10% of GDP (QAR 75bn) to mitigate the lockdown effect and protect jobs. Interest rates weredecreased twice by QCB in March to mirror the rate cuts by the US Federal Reserve, while QCB also pledged liquidity for the banking system to continue the credit flow.

The 2020 oil price forecast by Oxford Economics in March was$ 33.8pb compared to the $ 45.4pb budgeted. The budget deficitis expected to reach 6.2% of GDP this year.

Oil sector growth is projected at 0.9%. Despite the moratorium on North Field gas projects having been lifted, a 65% LNG capacity increase to 126 million metric tonnes per annum (mtpa) by 2027 most probably will take longer. The Barzan gas facility should still come online in 2020.

The non-hydrocarbon sector is expected to fall by 0.8% despite infrastructure spending. The Purchasing Managers’ Index (PMI) remained below the level of 50 in Q1 which indicates contraction, decreasing to 46.6 in March, still above a historic low of 31.4 in the eurozone.

The Consumer Price Index (CPI) inflation was negative for the year 2019 with an average of -0.7%, which is likely to continue in 2020 with a forecast of -0.6%. The introduction of VAT is likely to be postponed until after 2021.

(Economics Overview insight provided by Oxford Economicsas at March 2020.

Early indicators in April 2020 suggest that projections will be adjusted downward as the Global Covid-19 ‘lockdowns’ take hold and oil prices drop).

Figure 2

GDP (QAR billion) and real GDP growth (%), 2013 - 2019

Source: PSA/Oxford Economics

Figure 3

GDP hydrocarbon v non-hydrocarbon (QAR billion), 2013 -2019

Source: PSA/Oxford Economics

Figure 4

Real estate price index, Q1 2007 – Q4 2019 (base Q1 2009)

Source: QCB

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cushmanwakefield.com / 32 / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 3

Office Market OverviewThe commercial office market is yet to be fully affected by Covid-19

Except for a reduction in the number of new enquiries for office accommodation since mid-March, the initial impact of Covid-19on the commercial office market has been limited to date. That is mainly due to activity in the sector being driven by lease events such as lease expiries, which still need to be acted upon. Occupier relocation projects that started before the Covid-19 measures were introduced are progressing as planned, though in some cases they are subject to some delays. In general, the lockdown has not affected the commercial office market as much as the retail sector. Tenants are still able to access their offices, subject to government guidelines of reduced staffing and hours; therefore, there have not been multiple announcements by landlords on rent relief.

Some prospective new office occupiers are now considering serviced office options instead of conventional officeaccommodation, as a short-term measure, while market uncertainty prevails.

The total supply in the office market is now approx. 4.9 million sqm, with the prime sector accounting for 49% of this space. The vacancy rate has increased to over 30% in prime office districts, largely due to the increase in new supply in Lusail and Msheireb over the past 12 months.

Lusail’s infrastructure is now largely complete. In the Marina District, Y Tower and Union Trust Tower were completed in Q1,bringing the total supply in the district to just under 600,000 sqm.While some landlords are looking to secure a single occupier, smaller fitted office suites are increasingly available to lease in Lusail – which have not always been readily available in West Bay.

Q1 saw the arrival of new office supply in Energy City increase the total stock to just under 60,000 sqm, of which approximately 80% of which has been leased.

Shell and core space in Marina District is typically available forbetween QAR 80 and QAR 120 per sqm per month exclusive ofservice charges. Fitted suites are being offered at rents from QAR 120 per sqm per month, with a service charge and chilled water also payable.

Google Cloud and Microsoft Azure announced the launch of a proposed data centre projects in Doha under the Qatar Free Zone Authority (QFZA), which means committing significant investment to the country. Qatar has strict national data sovereignty regulations in line with the other GCC countries and it is hoped that this high-profile move will allow the public sector and private companies, especially financial services, to become more efficient compared to their global peers. Apart from theindirect effect of attracting foreign investment, this initiative should boost the IT sector and may result in a higher demand for office space.

Figure 5

Estimated office supply, Doha 2013 – Q1 2020 (million sqm)

Source: Cushman & Wakefield

Figure 6

Grade A office supply (million sqm) and availability (%), 2013 – Q1 2020

Source: Cushman & Wakefield

Figure 7

Office rents by district (QAR/sqm/month), 2013 – Q1 2020

Source: Cushman & Wakefield

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Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 2

Economic OverviewGDP growth is expected to be zero in 2020 due to the decrease in oil and gas prices

Oxford Economics forecasts a second consecutive year of stagnation in growth in 2020 as a result of decreased global demand for oil and gas because of coronavirus. Ongoing investment in the run-up to 2022 FIFA World Cup had been expected to boost growth to over 3% in 2021; however, this is less certain given the unknown duration of the Covid-19 pandemic, the associated mitigation measures, and the knock-on effects.

Qatar has announced an economic support package for the private sector worth approximately 10% of GDP (QAR 75bn) to mitigate the lockdown effect and protect jobs. Interest rates weredecreased twice by QCB in March to mirror the rate cuts by the US Federal Reserve, while QCB also pledged liquidity for the banking system to continue the credit flow.

The 2020 oil price forecast by Oxford Economics in March was$ 33.8pb compared to the $ 45.4pb budgeted. The budget deficitis expected to reach 6.2% of GDP this year.

Oil sector growth is projected at 0.9%. Despite the moratorium on North Field gas projects having been lifted, a 65% LNG capacity increase to 126 million metric tonnes per annum (mtpa) by 2027 most probably will take longer. The Barzan gas facility should still come online in 2020.

The non-hydrocarbon sector is expected to fall by 0.8% despite infrastructure spending. The Purchasing Managers’ Index (PMI) remained below the level of 50 in Q1 which indicates contraction, decreasing to 46.6 in March, still above a historic low of 31.4 in the eurozone.

The Consumer Price Index (CPI) inflation was negative for the year 2019 with an average of -0.7%, which is likely to continue in 2020 with a forecast of -0.6%. The introduction of VAT is likely to be postponed until after 2021.

(Economics Overview insight provided by Oxford Economicsas at March 2020.

Early indicators in April 2020 suggest that projections will be adjusted downward as the Global Covid-19 ‘lockdowns’ take hold and oil prices drop).

Figure 2

GDP (QAR billion) and real GDP growth (%), 2013 - 2019

Source: PSA/Oxford Economics

Figure 3

GDP hydrocarbon v non-hydrocarbon (QAR billion), 2013 -2019

Source: PSA/Oxford Economics

Figure 4

Real estate price index, Q1 2007 – Q4 2019 (base Q1 2009)

Source: QCB

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cushmanwakefield.com / 32 / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 5

Hospitality Market OverviewCovid-19 will undoubtedly affect the industry, which is yet to be fully reflected in the statistics available

According to the PSA (Planning and Statistics Authority), tourist arrivals in February 2020 exceeded those of 2019 both by air and sea. Unfortunately, the enforced government restrictions on international travel into Qatar resulted in a fall-off in arrival numbers from March 17th.

Hotel performance figures for Q1 will not capture the impact ofthe Covid-19 pandemic on the tourism sectors. The hospitality sector was the first to feel the implications of the Covid-19 measures in both room bookings and restaurant revenues.

Long term residential lets at the hotels with serviced apartmentshelped mitigate the revenue hit to some degree. While many hotel properties have revenue performance obligations in theirhotel management agreements; in most cases these Force Majeure clauses can only be implemented over a more prolonged downturn in performance.

In March, many government or semi-government entities announced measures to support the sector with Qatar Cool waiving both consumption and capacity fees for three months for hospitality establishments. Katara Hospitality also announced in March that their retail and F&B tenants within hotels will be exempted from rent for three months with immediate effect. The pandemic is also affecting the construction sector, which is likely to result in fewer hotels than expected being delivered this year.

The National Tourism Council’s report for 2019 was released in Q1. Last year saw continued growth in the sector, with a 9% increase in occupancy rates, despite the increase in overall supply. Visitor numbers reached 2.14 million, up 17% from 2018. This included a 98% growth in visitors on cruise ships – a key growth market in the tourism sector.

Hotel supply increased to 27,261 keys in 130 establishments by January 2020, a 6% increase on the previous year. The market is dominated by five-star brands, which make up 56% of the overall supply. There are currently 107 hotel and hotel apartment buildings under construction in Qatar, which will provide 21,577 additional rooms. This will bring total supply to almost 50,000 rooms by 2022 – a figure which will be supplemented by floating hotels and cruise ships for the 2022 FIFA World Cup

Average Daily Rates in Qatar’s hotels fell by 2% in 2019 reflecting increased competition and better value available in the market. The increase in occupancy last year, and a reduction in ADR’s reflected an overall increase in Revenue Per Average Room of 7%. The improving performance will undoubtedly be interrupted in 2020 by the Covid-19 epidemic, with uncertainty prevailing about how and when the hospitality sector can fully recover.

Figure 11

No. of hotel/hotel entities and room keys, 2011 – Q1 2020

Source: Cushman & Wakefield

Figure 12

Keys by star rating, Q1 2020

Source: Cushman & Wakefield

Figure 13

Rolling 12 months’ hotel performance indicators (March–Feb): RevPAR, occupancy (%)

Source: PSA

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Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 4

Residential Market OverviewThe residential sector is still active despite Covid-19 restrictions

Despite the support measures introduced by the government,employers in some industries have been forced to furlough staff, reduce salaries, or in some cases make people redundant.While no official policy has been introduced on residential rent relief, some residential landlords have started negotiating with tenants on deferring rental payments or granting temporary discounts.

Amenity provisions in residential developments have been ordered to close, while service staffing levels have been reduced to a skeleton staff in many cases. These measures, together with social distancing restrictions, are making it challenging to lease property. As health and safety concerns increase, leasing agents are increasingly turning to virtual tours to market their properties.

Some landlords are extending temporary discounts of 20-50%to be paid back later, while the others are using a rent-freeincentive – one or two months provided a renewed contract is signed/extended for up to two years.

Despite the challenges faced due to Covid-19, residential leases continued to expire, with renewals and re-locations driving activity. Some residential occupiers are using this time to take advantage of the recent fall in rents to upgrade their current accommodation.

A number of new towers were launched in Viva Bahriya in Q1,including Tower 13, which opened in January and Tower 15,which opened in March. It is likely that the planned release of other new towers in Q2 will be delayed, given the ongoing Covid-19 restrictions. Abraj Bay Towers, part of Abraj Quartier, areexpected to start leasing in June or July of this year.

Rental levels for new, premium quality, furnished apartments in Viva Bahriya are on average QAR 7,500 and QAR 11,000 per month for a studio and one-bedroom respectively.

The latest phase of residential apartments has been released in Msheireb Downtown. One-bedroom apartments are being offered at QAR 8,500 – 10,500 per month, while two and three-bedroom apartments are available to lease from QAR 13,500per month.

The Supreme Committee for Delivery & Legacy (SC) announcedin Q1 that individual landlords or companies who own multiple,adjacent, fully furnished units within villa compounds, apartment blocks or mixed-use schemes would potentially be able to avail of a five-year lease with SC with a start date of either January01st 2022 or August 01st 2021. This is likely to prove attractive to many landlords given the pipeline of new supply. The SC has set out strict requirements relating to quality and specification, which should help to improve overall standards when these properties return to the market after the World Cup.

Figure 8

Estimated apartment and villa supply, Qatar, 2013 – 2020

Source: Cushman & Wakefield

Figure 9

Average apartment rents, Porto Arabia, (QAR/month), 2013– Q1 2020 (semi-furnished)

Source: Cushman & Wakefield

Figure 10

Average apartment value Porto Arabia (QAR per sqm),2013 – Q1 2020

Source: Cushman & Wakefield

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cushmanwakefield.com / 54 / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 5

Hospitality Market OverviewCovid-19 will undoubtedly affect the industry, which is yet to be fully reflected in the statistics available

According to the PSA (Planning and Statistics Authority), tourist arrivals in February 2020 exceeded those of 2019 both by air and sea. Unfortunately, the enforced government restrictions on international travel into Qatar resulted in a fall-off in arrival numbers from March 17th.

Hotel performance figures for Q1 will not capture the impact ofthe Covid-19 pandemic on the tourism sectors. The hospitality sector was the first to feel the implications of the Covid-19 measures in both room bookings and restaurant revenues.

Long term residential lets at the hotels with serviced apartmentshelped mitigate the revenue hit to some degree. While many hotel properties have revenue performance obligations in theirhotel management agreements; in most cases these Force Majeure clauses can only be implemented over a more prolonged downturn in performance.

In March, many government or semi-government entities announced measures to support the sector with Qatar Cool waiving both consumption and capacity fees for three months for hospitality establishments. Katara Hospitality also announced in March that their retail and F&B tenants within hotels will be exempted from rent for three months with immediate effect. The pandemic is also affecting the construction sector, which is likely to result in fewer hotels than expected being delivered this year.

The National Tourism Council’s report for 2019 was released in Q1. Last year saw continued growth in the sector, with a 9% increase in occupancy rates, despite the increase in overall supply. Visitor numbers reached 2.14 million, up 17% from 2018. This included a 98% growth in visitors on cruise ships – a key growth market in the tourism sector.

Hotel supply increased to 27,261 keys in 130 establishments by January 2020, a 6% increase on the previous year. The market is dominated by five-star brands, which make up 56% of the overall supply. There are currently 107 hotel and hotel apartment buildings under construction in Qatar, which will provide 21,577 additional rooms. This will bring total supply to almost 50,000 rooms by 2022 – a figure which will be supplemented by floating hotels and cruise ships for the 2022 FIFA World Cup

Average Daily Rates in Qatar’s hotels fell by 2% in 2019 reflecting increased competition and better value available in the market. The increase in occupancy last year, and a reduction in ADR’s reflected an overall increase in Revenue Per Average Room of 7%. The improving performance will undoubtedly be interrupted in 2020 by the Covid-19 epidemic, with uncertainty prevailing about how and when the hospitality sector can fully recover.

Figure 11

No. of hotel/hotel entities and room keys, 2011 – Q1 2020

Source: Cushman & Wakefield

Figure 12

Keys by star rating, Q1 2020

Source: Cushman & Wakefield

Figure 13

Rolling 12 months’ hotel performance indicators (March–Feb): RevPAR, occupancy (%)

Source: PSA

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Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 4

Residential Market OverviewThe residential sector is still active despite Covid-19 restrictions

Despite the support measures introduced by the government,employers in some industries have been forced to furlough staff, reduce salaries, or in some cases make people redundant.While no official policy has been introduced on residential rent relief, some residential landlords have started negotiating with tenants on deferring rental payments or granting temporary discounts.

Amenity provisions in residential developments have been ordered to close, while service staffing levels have been reduced to a skeleton staff in many cases. These measures, together with social distancing restrictions, are making it challenging to lease property. As health and safety concerns increase, leasing agents are increasingly turning to virtual tours to market their properties.

Some landlords are extending temporary discounts of 20-50%to be paid back later, while the others are using a rent-freeincentive – one or two months provided a renewed contract is signed/extended for up to two years.

Despite the challenges faced due to Covid-19, residential leases continued to expire, with renewals and re-locations driving activity. Some residential occupiers are using this time to take advantage of the recent fall in rents to upgrade their current accommodation.

A number of new towers were launched in Viva Bahriya in Q1,including Tower 13, which opened in January and Tower 15,which opened in March. It is likely that the planned release of other new towers in Q2 will be delayed, given the ongoing Covid-19 restrictions. Abraj Bay Towers, part of Abraj Quartier, areexpected to start leasing in June or July of this year.

Rental levels for new, premium quality, furnished apartments in Viva Bahriya are on average QAR 7,500 and QAR 11,000 per month for a studio and one-bedroom respectively.

The latest phase of residential apartments has been released in Msheireb Downtown. One-bedroom apartments are being offered at QAR 8,500 – 10,500 per month, while two and three-bedroom apartments are available to lease from QAR 13,500per month.

The Supreme Committee for Delivery & Legacy (SC) announcedin Q1 that individual landlords or companies who own multiple,adjacent, fully furnished units within villa compounds, apartment blocks or mixed-use schemes would potentially be able to avail of a five-year lease with SC with a start date of either January01st 2022 or August 01st 2021. This is likely to prove attractive to many landlords given the pipeline of new supply. The SC has set out strict requirements relating to quality and specification, which should help to improve overall standards when these properties return to the market after the World Cup.

Figure 8

Estimated apartment and villa supply, Qatar, 2013 – 2020

Source: Cushman & Wakefield

Figure 9

Average apartment rents, Porto Arabia, (QAR/month), 2013– Q1 2020 (semi-furnished)

Source: Cushman & Wakefield

Figure 10

Average apartment value Porto Arabia (QAR per sqm),2013 – Q1 2020

Source: Cushman & Wakefield

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

2013 2014 2015 2016 2017 2018 2019 2020Apartments Villas

5,000

7,000

9,000

11,000

13,000

15,000

17,000

19,000

21,000

2013 2014 2015 2016 2017 2018 2019 Q12020

One Bed Two Bed Three Bed

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2013 2014 2015 2016 2017 2018 2019 Q12020

QATAR Q1 2020

cushmanwakefield.com / 54 / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 6

Retail Market OverviewMany landlords extend rent relief to their tenantsas retail outlets are forced to close

On March 15th, the Ministry of Commerce and Industry ordered retail malls to close, with only supermarkets and pharmacies allowed to remain open.

Regulations for restaurants, cafés, and standalone shops have been gradually tightening and refining since then, with some F&B outlets continuing to operate for delivery/take-out.

To deal with the unprecedented crisis, support measures have been announced by various government and private entities,varying from three to six months’ rent relief. Some landlords have granted their F&B tenants relief from rent and service/utility charges until further notice (Aspire Zone, Katara Cultural Village,Msheireb Properties). The Private Engineering Office, which manages Souq Waqif, Al Wakrah Souq and other traditional markets, have exempted tenants from rent for four months.

Elsewhere, Qatari Diar exempted its F&B tenants in Lusail Marina and Barwa Commercial Avenue from rent for three months effective from April, with UDC announced similar relieffor all their tenants. Mall of Qatar and Ezdan Malls extended rent relief to all their tenants for three months starting from March, while Doha Festival City Mall offered the same support to eligible tenants effective from April.

Both Barwa Real Estate Group and Woqod have postponed or exempted all their tenants from rent for three months starting from April. Other private landlords have followed suit, sometimes postponing rent rather than waiving completely.

While rent relief has been welcomed by tenants throughout the market, other operating costs cannot be serviced by salesrevenues this time, which is raising questions about the number of retailers that may struggle to remain open in a prolonged lockdown.

One of the retail segments which has been performing well is the supermarket sector and certain parts of the F&B sector. In recent weeks, Al Meera opened at The Mall - an established retail development on D-Ring Road. Omni-channel F&B outlets have been able to manage the transition better than others,while the other retailers and malls have been adjusting to enabletheir online/phone ordering sales channels.

Figure 14

Organised Retail Supply (Malls) (sqm) Year End 2013 –2020f

Source: Cushman & Wakefield

Figure 15

Average retail mall occupancy (%), Doha 2013 – Q1 2020

Source: Cushman & Wakefield

Table 1

Proposed new retail mall openings 2020

Project LocationEstimated

Completion Date

Doha Mall Abu Hamour 2020

Northgate Mall North Doha 2020

La Galleria + other retail Msheireb 2020

Doha Souq Al Mirqab 2020Source: Cushman & Wakefield

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2013

2014

2015

2016

2017

2018

2019

2020

f60%

65%

70%

75%

80%

85%

90%

95%

100%

2013 2014 2015 2016 2017 2018 2019 2020f

QATAR Q1 2020

cushmanwakefield.com / 76 / Cushman & Wakefield

Qatar Q1 2020

cushmanwakefield.com PROPERTY TIMES 6

Retail Market OverviewMany landlords extend rent relief to their tenantsas retail outlets are forced to close

On March 15th, the Ministry of Commerce and Industry ordered retail malls to close, with only supermarkets and pharmacies allowed to remain open.

Regulations for restaurants, cafés, and standalone shops have been gradually tightening and refining since then, with some F&B outlets continuing to operate for delivery/take-out.

To deal with the unprecedented crisis, support measures have been announced by various government and private entities,varying from three to six months’ rent relief. Some landlords have granted their F&B tenants relief from rent and service/utility charges until further notice (Aspire Zone, Katara Cultural Village,Msheireb Properties). The Private Engineering Office, which manages Souq Waqif, Al Wakrah Souq and other traditional markets, have exempted tenants from rent for four months.

Elsewhere, Qatari Diar exempted its F&B tenants in Lusail Marina and Barwa Commercial Avenue from rent for three months effective from April, with UDC announced similar relieffor all their tenants. Mall of Qatar and Ezdan Malls extended rent relief to all their tenants for three months starting from March, while Doha Festival City Mall offered the same support to eligible tenants effective from April.

Both Barwa Real Estate Group and Woqod have postponed or exempted all their tenants from rent for three months starting from April. Other private landlords have followed suit, sometimes postponing rent rather than waiving completely.

While rent relief has been welcomed by tenants throughout the market, other operating costs cannot be serviced by salesrevenues this time, which is raising questions about the number of retailers that may struggle to remain open in a prolonged lockdown.

One of the retail segments which has been performing well is the supermarket sector and certain parts of the F&B sector. In recent weeks, Al Meera opened at The Mall - an established retail development on D-Ring Road. Omni-channel F&B outlets have been able to manage the transition better than others,while the other retailers and malls have been adjusting to enabletheir online/phone ordering sales channels.

Figure 14

Organised Retail Supply (Malls) (sqm) Year End 2013 –2020f

Source: Cushman & Wakefield

Figure 15

Average retail mall occupancy (%), Doha 2013 – Q1 2020

Source: Cushman & Wakefield

Table 1

Proposed new retail mall openings 2020

Project LocationEstimated

Completion Date

Doha Mall Abu Hamour 2020

Northgate Mall North Doha 2020

La Galleria + other retail Msheireb 2020

Doha Souq Al Mirqab 2020Source: Cushman & Wakefield

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2013

2014

2015

2016

2017

2018

2019

2020

f

60%

65%

70%

75%

80%

85%

90%

95%

100%

2013 2014 2015 2016 2017 2018 2019 2020f

EMEAJohn ForresterChief Executive | EMEA+44 (0)20 3296 2002john.forrester@cushwake.com

Qatar - DohaEdd BrookesGeneral Manager+974 5586 7044edd.brookes@cushwake.qa

UAE - DubaiEdd BrookesHead of Middle East+971 (0) 4 518 2629middleeast@cushwake.com

EMEAAndrew PhippsHead of EMEA Research & Insight+44 (0)20 3296 4236andrew.phipps@cushwake.com

Qatar - DohaJohnny ArcherHead of Consulting & Research+974 4483 7395johnny.archer@cushwake.qa

UAE - DubaiWaleed MahmoudSenior Researcher+971 (0) 4 518 2628waleed.mahmoud@cushwake.com

DisclaimerThis report has been produced by Cushman & Wakefield for use by those with an interest in commercial property solely for information purposes. It is not intended to be a complete description of the markets or developments to which it refers. The report uses information obtained from public sources which Cushman & Wakefield believe to be reliable, but we have not verified such information and cannot guarantee that it is accurate and complete. No warranty or representation, express or implied, is made as to the accuracy or completeness of any of the information contained herein and Cushman & Wakefield shall not be liable to any reader of this report or any third party in any way whatsoever. All expressions of opinion are subject to change. The data contained in this report is based upon that collected by Cushman & Wakefield. Our prior written consent is required before this report can be reproduced in whole or in part.©2019 Cushman & Wakefield.

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