Qatar Real Estate Report Q3 2012
BMI’s Qatar real estate report examines growth opportunities and risks in this fast-growing Gulf market. Our 2012 forecasts see a 5-10% rise in rents in the office, retail and industrial rental segments of our three surveyed cities: Doha, Al-Khor and Al-Wakra. The Qatari industrial sub-sector is limited by the shift away from rentals and towards direct development. Qatar’s office and retail segments are growing fast and present bullish medium-term prospects, despite the fact that 2011 saw large falls in rental rates in these segments, particularly in Doha. The tourism sector presents significant growth potential, despite its nascent stage, suggesting that the retail segment will be less likely to suffer from oversupply than the office segment.
Qatar has not seen as spectacular a real estate bubble as the UAE, its eastern neighbour. Consequently, it has not had to deal with the challenges of government bailouts and risks of bondholder losses. The Qatari real estate sector features both state-backed and private sector players, with the state-backed Qatari Diar essentially an arm of Qatari foreign investment strategy. As Qatar looks to diversify its economy and shift its reliance away from the hydrocarbons sector, real estate could be well placed to benefit from diversifying investments.
The 2022 World Cup presents an obvious bonanza for the sector, although it stands to reason that much growth will be organic Qatari demand, as flows of retail-minded tourists are more likely to be directed to the UAE (primarily Dubai). Despite our in-country sources having limited information on vacancy rates, it is clear that the current effect of hosting the 2022 World Cup is an increase in demand. This, together with tougher lending conditions slowing development projects, should help take up some of the supply in the short term.
Given that native citizens enjoy one of the world’s highest per-capita incomes, Qatar has not seen any political unrest inspired by the uprisings seen across the Middle East and North Africa in 2011. The risks of terrorist attacks are also considered low. However, the risk of conflict between the pro-US Gulf states and Iran remains a concern. Qatar hosts US military forces on its soil and has taken an activist role in regional conflicts such as in Libya, Syria and Bahrain.
Qatar has not seen as spectacular a real estate bubble as the UAE, its eastern neighbour. Consequently, it has not had to deal with the challenges of government bailouts and risks of bondholder losses. The Qatari real estate sector features both state-backed and private sector players, with the state-backed Qatari Diar essentially an arm of Qatari foreign investment strategy. As Qatar looks to diversify its economy and shift its reliance away from the hydrocarbons sector, real estate could be well placed to benefit from diversifying investments.
The 2022 World Cup presents an obvious bonanza for the sector, although it stands to reason that much growth will be organic Qatari demand, as flows of retail-minded tourists are more likely to be directed to the UAE (primarily Dubai). Despite our in-country sources having limited information on vacancy rates, it is clear that the current effect of hosting the 2022 World Cup is an increase in demand. This, together with tougher lending conditions slowing development projects, should help take up some of the supply in the short term.
Given that native citizens enjoy one of the world’s highest per-capita incomes, Qatar has not seen any political unrest inspired by the uprisings seen across the Middle East and North Africa in 2011. The risks of terrorist attacks are also considered low. However, the risk of conflict between the pro-US Gulf states and Iran remains a concern. Qatar hosts US military forces on its soil and has taken an activist role in regional conflicts such as in Libya, Syria and Bahrain.
Contents
Executive SummarySWOT Analysis
Qatar Real Estate/Construction SWOT
Qatar Political SWOT
Qatar Economic SWOT
Qatar Business Environment SWOT
Real Estate Market Overview
Market Analysis – Office
Rents And Yields
Table: Historic Office Rents, 2010-2011 (QAR per m2/month)
Table: Net Office Yields, 2011-2012 (%)
Table: Terms Of Office Rental Contract/Leases, Mid-2011
Supply And Demand
Industry Forecast Scenario
Table: Forecast Office Rents, 2012 (QAR per m2/month)
Table: Forecast Office Net Yields, 2008-2016 (%)
Market Analysis – Retail
Rents And Yields
Table: Historic Retail Rents, 2010-2011 (QAR per m2/month)
Table: Net Retail Yields, 2011-2012 (%)
Table: Terms Of Retail Rental Contract/Leases, Mid-2011
Supply And Demand
Industry Forecast Scenario
Table: Forecast Retail Rents, 2012 (QAR per m2/month)
Table: Forecast Retail Net Yield, 2008-2016 (%)
Market Analysis – Industrial
Rents And Yields
Table: Historic Industrial Rents, 2010-2011 (QAR per m2/month)
Table: Net Industrial Yields, 2011-2012 (%)
Table: Terms Of Industrial Rental Contract/Leases, Mid-2011
Supply And Demand
Industry Forecast Scenario
Table: Forecast Industrial Rents, 2012 (QAR per m2/month)
Table: Forecast Net Industrial Yields, 2008-2016 (%)
Construction And Infrastructure Industry Outlook
Table: Qatar Construction And Infrastructure Industry Data, 2007-2016
Table: Qatar Construction And Infrastructure Industry Data, 2012-2021
Construction And Infrastructure Forecast Scenario
Macroeconomic Outlook
Solid Growth To Continue In 2012
Table: Qatar – Economic Activity, 2011-2016
Real Estate Risk/Reward Ratings
Real Estate/Construction Risk/Reward Ratings
Table: Middle East And North Africa Risk/Reward Ratings, Q312
Qatar’s Business Environment
Table: BMI Business And Operation Risk Ratings
Institutions
Table: BMI Legal Framework Rating
Infrastructure
Market Orientation
Table: Labour Force Quality
Table: Middle East & Africa – Annual FDI Inflows, 2008-2010
Table: Trade And Investment Ratings
Table: Top Export Destinations, 2002-2009 (US$mn)
Operational Risk
Competitive Landscape
Company Profiles
Barwa Real Estate
Qatari Diar Real Estate Investment
Ezdan Real Estate
United Development Company
BMI Methodology
How We Generate Our Industry Forecasts
Construction Industry
Bank Lending
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