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Real Estate Market 4th Quarter | 2019 Review VPI ValuStrat Price Index

Residential The fourth quarter 2019 ValuStrat Price Index (VPI)-Residential, displayed an overall 5.0% annual and 0.8% quarterly decline in capital values. Villa and freehold apartment prices saw marginal QoQ declines of 0.5% and 1.8% respectively. Amongst freehold apartments, The Pearl witnessed the highest overall decline in values followed by Lagoon and . A quarterly capital depreciation of less than 2% was observed in clusters of , , , and Al Khor. The remaining clusters experienced no change in capital values. Gross yields for residential units averaged at an overall 5.0% adjusted by 6.1% for apartments and 4.5% for villas.

VPI - Residential Capital Values 13 Villa and 3 Apartment Locations [Base: Q1 2016=100]

120

100.0 100 96.3 94.2 90.9 89.8 87.2 84.9 82.7 81.3 77.7 75.8 75.0 80 73.4 72.8 71.8 71.2

60

40

20

0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2016 2017 2018 2019

Source: ValuStrat

1 | Qatar Real Estate Market 4th Quarter 2019 Review Macro-Economic Snapshot

• International Monetary Fund (IMF) projected Qatar Population real GDP of Qatar to grow by 2% in 2019 on the back of robust non-hydrocarbon sector growth and oil and gas production recovery 2,773,000 2019-Q4 2,674,000 • The state budget for 2020 was announced 2018 which forecasted a budget surplus of QAR 500 million and expenditure in major projects at 2,641,000 QAR 90 billion, amidst a continued conservative 2017 oil price estimate of $55 a barrel 2,597,000 2016 • Population is estimated at 2.77 million as of Q4 2019. World Bank projected population of Qatar 2,421,000 to grow to 2.88 million in 2020 2015

• Gold Line (11 stations) starting from Ras Bu 2,235,000 Abboud to Al Aziziya, Green Line (11 stations) 2014 connecting from to Al Riffa and remaining stations of Red Line including 2,045,000 Hamad International Airport, Lusail, Qatar 2013 University and Katara were made operational 1,836,000 • During Q4 2019, oil export revenue reduced by 2012 17% YoY and imports contracted by 5% YoY

Source: Planning & Statistics Authority (PSA)

Consumer Price Index vs. Housing Index • During Q4 2019, the January 2016 – YTD Consumer Price Index (CPI) stood at 107.85 125 points (base year 2013) indicating a marginal 120 decrease of 0.6% 115 annually and 0.8% quarter wise 110

105 • Housing and Utility Expenses Index 100 decreased 2.3% YoY 95 and 0.9% QoQ Jul Jul Jul Jul Oct Oct Oct Oct Apr Apr Apr Apr Jan Jan Jan Jan Jun Jun Jun Jun Feb Feb Feb Feb Sep Sep Sep Sep Dec Dec Dec Dec Nov Nov Nov Nov Aug Aug Aug Aug Mar Mar Mar Mar May May May May

2016 2017 2018 2019

Consumer Price Index (2013=100) Housing, Water, Electricity, Gas and Other Fuels

Source: Planning & Statistics Authority (PSA) Residential Supply

• Total housing stock by end of 2019 was Qatar Residential Supply approximately 297,700 units with the addition 2016-2020 of 1,750 villas and apartments during Q4 2019 (’000 UNITS)

• Apartment supply consisted of 1,600 units coming from project handovers in Lusail (Fox Hills, Al Kharaej and Marina District), The Pearl, and

2020E • This year's Cityscape exhibition unveiled 10 298 notable residential projects such as Qetaifan 2019E Island North Phase 1 in Lusail, Gewan Island 7.7 290 2018 in The Pearl, Floresta Garden in The Pearl and 290 Al Khail in Mushiereib Downtown 2017 286 2016 • Projected completions for 2020 have been 280 adjusted upwards to 10,000 units due to

delayed deliveries from 2019 Existing Expected Supply*

*May be subject to significant downward adjustment Source: Planning & Statistics Authority (PSA), MEED Projects, ValuStrat

Residential Sales

• Median transacted ticket size for houses Residential Median Transacted Ticket Size increased by 6.5% quarterly and 3.7% annually -6.7% 3.7% Last 2 Years Last Year • Citywide transaction volumes for houses declined 3% annually, however on a quarterly basis, grew 18%

• The median transacted price for residential houses was QAR 2.8 million where the five largest ticket sizes were seen in and The Pearl 0.0% 6.5% Last 6 Months Last Quarter • 65 transactions were recorded for residential buildings where Al Sadd, Al Mansoura, and saw the highest transacted values

• During 2019, The Pearl and West Bay Lagoon Source: Ministry of Justice, ValuStrat saw 1,008 units sold (an increase of 72% YoY) worth QAR 2 billion in total, a 55% increase over the previous year

3 | Qatar Real Estate Market 4th Quarter 2019 Review Residential Rents

• Residential median asking rents declined 6% Residential Median Asking Rents YoY and 1.1% QoQ • The median monthly asking rent for -16.2% -6.0% apartments fell marginally by 1% quarterly Last 2 Years Last Year and 5.8% annually. One-bedroom apartments experienced the highest annual fall in rents of up to 8% • Highest annual falls for asking rents up to 12% were experienced in Al Mansoura, Al Muntazah, Al Wakrah, and Lusail • Apartments in Al Sadd experienced the least -2.7% -1.1% deductions in rents, down 4% YoY compared Last 6 Months Last Quarter to other areas • The median monthly asking rent for villas fell 1.2% QoQ and 8% YoY. 4-bedroom villas experienced the highest annual decline in rents of up to 12% • Villas within compounds in , Ain Khaled, Source: ValuStrat Abu Hamour and saw the highest fall in annual rents by an estimated 7% while standalone villas in these areas reduced by an average 2% YoY

Median Monthly Asking Rent (QAR) and Quarterly Change (%)

Villas Apartments

7,000 4,500 Al Wakrah 7,750 -1% Al Mansoura 5,500 0% 11,000 6,250

9,000 5,250 Al 10,500 -2% Lusail 7,250 0% 11,500 8,000

9,250 5,250 Abu Hamour 11,750 0% Al Sadd 6,750 0% 13,250 8,500

12,000 6,750 Fereej Bin Al Waab 13,000 -1% 7,000 -4% Mahmoud 13, 500 7,750

18,000 8,250 West Bay 18,750 -1% The Pearl 10,250 0% Lagoon 20,000 12,500

Three Bedroom Five Bedroom One Bedroom Three Bedroom Four Bedroom Average Quarterly Change (%) Two Bedroom Average Quarterly Change (%)

Source: ValuStrat Source: ValuStrat Office Supply

• 2019 began with an estimated 4.14 million Qatar Office Supply sq m of office Gross Leasable Area (GLA) 2016-2020 (Million sq m GLA) • 70% of the anticipated 1 million sq m GLA was completed during the year making the total 1.0 office stock 4.8 million sq m by the end of 0.7 4.8 2019 4.1 3.9 4.1 • Five office projects were added this quarter in 3.5 Lusail, Al Mirqab, C-Ring Road (Al Mansoura) and Al Sadd comprising 160,000 sq m GLA

• Upcoming projects in 2020, currently under development totalled 1 million sq m GLA, 80% of which are located in Lusail (Fox Hills, Energy District and Marina District), and Musheireb Downtown whereas the 2016 2017 2018 2019E 2020E remaining mixed amongst Duhail, , Al Existing Stock Expected Supply Hitmi, Al Sadd, and Al Source: MEED Projects, ValuStrat Muntazah

Office Performance

• Median office asking rents fell 17% YoY and Office Median Asking Rent (QAR/sq m/Month) 1% QoQ and Quarterly Change (%)

• 2% quarterly drop in rents observed in Lusail, -2% -2% -2% -1% 0% -2% -3% as median monthly asking rents declined to QAR 88 per sq m. Newly opened buildings offered asking rents that ranged from QAR 95 to QAR 125 per sq m depending on size, quality and view with rent-free period up to 3 months

• Offices along Salwa road experienced the highest quarterly decline in asking rents up to 3%, with rates that ranged from QAR 65 to QAR 100 per sq m

• Offices listed for sale in Lusail had asking 118 98 88 86 84 80 76 prices that ranged from QAR 16,250 per sq m West C/D Ring Lusail Citywide Al Sadd Grand Hamad Salwa to QAR 20,500 per sq m Bay Road Avenue Road

Median Asking Rate (QAR/sq m) Quarterly Change (%) Source: ValuStrat

5 | Qatar Real Estate Market 4th Quarter 2019 Review Retail Supply

• Retail supply grew 5% YoY during 2019 Retail Malls and Shopping Centres reaching up to 1.89 million sq m GLA by Q4 (‘000 sq m GLA) 2019 330 • Due to delayed deliveries, an estimated 462,000 sq m (Boulevard Mall in Jeryan Jenaihat, 04 Mall in The Pearl, J Mall in , Place Vendome in Lusail and Mall in Al Maamoura) of organised retail 132 space is projected for completion in 2020

• Based on GLA and population figures, shopping centre GLA in Qatar is 660 square meters per 1,000 capita compared to the GCC average of 620 square meters per 1,000 capita

40 202 673 981

Neighbourhood Community Regional Super Regional (3k-10k sq m) (10k-30k sq m) (30k-90k sq m) (> 90k sq m)

Existing Stock Expected Supply (till 2020) Source: ValuStrat

Retail Performance

• The retail market continued to remain tenant Distribution of GLA of Shopping Centres/Malls friendly; landlords offered lucrative incentives across Municipalities (e.g. waiving service charges or turnover rents) to retain existing retailers and attract new leases 3% 14%

• Median monthly asking rents among street shops in Doha was QAR 182 per sq m, down by 5% QoQ and 13% YoY

• Highest fall in quarterly rents by an average 38% 14% was observed in shops along C-Ring 41% Road, Fereej Bin Mahmoud, Fereej Abdul Aziz, Lusail and

• Median asking rents among street retail units outside Doha was QAR 172 per sq m, fell by 4% 9.5% YoY with no change compared to Q3 2019

Al Khor Al Wakra • Highest fall in quarterly asking rents of up to 15% outside Doha was experienced in Al Khor Doha Umm Salal and shops along Salwa Road Source: ValuStrat Hotel Supply

• As per latest report published by Qatar Hotel Room Supply National Tourism Council (QNTC), there was 2016-2020 a total of 26,778 keys across 128 properties (’000 KEYS) as of Q3 2019 8.5 • Park Hyatt (187 keys) in Musheireb Downtown, Saraya Town Hotel (310 keys) in 2.5 Al Ghanim, Double Tree by Hilton Doha (139 keys) in Al Sadd and Hilton Doha The Pearl Residences (414 rooms) in The Pearl were unveiled adding a total of 1,050 rooms • Tower 26 in Porto Arabia- The Pearl (250 28.3 rooms) was rebranded as Sedra Arjaan by Rotana, whereas Fraser Suites- West Bay 25.8 (357 rooms) was rebranded as Al Rabban 24.9 25.8 22.9 Suites-West Bay. • Rosewood Hotels & Resorts launched in Lusail, projected to add 185 rooms, 173 2019E 2020E serviced apartments and 300 standard 2016 2017 2018 apartments once completed in 2022 Hotel & Serviced Apt Rooms Expected Supply

• Approximately, 7,000 hotel keys and 1,500 Source: Qatar National Tourism Council (QNTC), ValuStrat hotel apartments are in the pipeline till 2020 of which 50% are 5-star category

Hotel Performance

• Till November 2019, the total number of visitor • Till November 2019, average occupancy of arrivals in Qatar stood at 1.86 million, up by 14% hotels increased by 6% annually to 64%, while YoY compared to the same period last year hotel apartment occupancy remained • Visitor arrivals from Americas and Europe unchanged at 72% indicated significant growth, up by 24% YoY YTD • Average Daily Rate (ADR) for hotels declined by November 2019 3% YoY whereas hotel apartments ADR fell by at least 2% YoY Distribution of Qatar Visitors by Region Jan 2018-Nov 2019

9% 8% 9% 8% 8% 11% 10% 9% 8% 7% 9% 10% 9% 8% 9% 8% 9% 10% 10% 10% 10% 9% 9%

34% 35% 35% 21% 23% 38% 38% 33% 22% 25% 28% 18% 25% 25% 29% 31% 34% 35% 21% 28% 27% 34% 33%

43% 40% 44% 45% 40% 35% 42% 42% 37% 37% 38% 39% 45% 45% 34% 45% 37% 50% 35% 36% 40% 48% 41%

3% 2% 3% 2% 3% 3% 3% 3% 2% 2% 2% 3% 4% 2% 2% 3% 1% 2% 2% 2% 6% 3% 3% 7% 7% 8% 7% 2% 6% 6% 6% 6% 9% 7% 8% 8% 8% 7% 9% 8% 6% 8% 8% 7% 7% 7% 9% 10% 10% 13% 11% 9% 16% 12% 17% 11% 11% 10% 14% 13% 11% 8% 10% 10% 13% 13% 10% 8% 10% Jul Jul Oct Oct Apr Apr Jan Jan Jun Jun Feb Feb Sep Sep Dec Nov Nov Aug Aug Mar Mar May May

2018 2019

GCC Other Arab Other Africa Other Asia inc/Oceania Europe Americas

Source: Planning & Statistics Authority (PSA), ValuStrat

7 | Qatar Real Estate Market 4th Quarter 2019 Review Industrial Investment/Supply

• Driven by increased supply in basic metals Industrial Production Index and rubber products, manufacturing output Q1 2016 – YTD increased 1.8% YoY during Q3 2019, as per

latest Industrial Production Index published 118 by MDPS 116 • Barwa Real Estate announced completion of 114 561 warehouses (300 sq m each) and 118 112 workshops (144 sq m each), developed across 110 a land area of 684,134 sq m within Barwa 108 Baraha Project in Zone 91 (/Al 106 104 Wukair/) 102 • Manateq has awarded Gulf Warehousing 100 Company (GWC) a QAR 1.5 billion worth 98 logistics park (), developed over a Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 land parcel of 1.48 sq km, in a public-private 2016 2017 2018 2019 partnership deal with a 30 year lease tenure.

The park will include ambient and cold IPI (2013=100) Manufacturing Mining and Quarrying storage facilities to be completed in 5 years Source: Planning & Statistics Authority (PSA), ValuStrat • Manateq has decided to expand Logistics Park (9.3 million sq m land area) from Q2 2020

Industrial Performance

• As per PSA, till November 2019 net tonnage of • Average asking rent for dry/ambient warehouses bulk cargo doubled to 112 million tonnes with in Qatar reduced by 6% YoY and increased by Ras Laffan and Hamad Port receiving the highest 1.4% QoQ traffic • In temperature-controlled warehouses intended • In newly established project, for food and chemical storage, average asking the monthly asking rent for warehouses (300 rent fell by 3% QoQ and 11.5% YoY sq m) was QAR 12,500 and for workshops (144 • Average asking rents for cold storage being sq m) was QAR 9,000 leased unit wise ranged from QAR 6,000-15,000 per month in Doha , where average unit sizes scaled from 50-80 sq m

Warehouses Asking Rental Rates (QAR/sq m per month) 75 40 50 30 20 10 10 12

Sailiya Wukair New Industrial Area Old Industrial Area

Rent High Rent Low

Source: ValuStrat

Al Mina Valustrat In Media

25th December, 2019 9th January, 2020 Qatar set to account for 308,000 Shop Qatar: Shopper’s delight & growth residential units, 34,000 hotel keys in stimulator 2020: ValuStrat “Anum Hasan, ValuStrat senior market research “Qatar is set to account for 34,000 hotel keys and hotel analyst said, “Events such as ‘Shop Qatar’ have been an apartments, 308,000 residential units and an office effective demand driver for the retail sector in Qatar. It supply of 5.8 sq m gross leasable area (GLA) in 2020, a has been successful in promoting Qatar in the GCC new research has shown. This, according to research region as being ‘retailer friendly’.” and consultancy firm ValuStrat, depends on "delivery of all projects on time".

Nearly 70% of the upcoming residential supply in 2020 is projected to launch in prime locations such as Al Dafna, Lusail and The Pearl, which “might negatively impact” the market rent in the area once projects are handed over..”

28th December, 2019 Foreign investment-friendly laws bolster Qatar's real estate growth in 2019: ValuStrat “Pawel Banach, ValuStrat general manager, said, “2019 has been an instrumental year for real estate of Qatar as a result of introduction of foreign investment-friendly laws such as a legalisation of 15th October, 2019 foreign ownership for various asset classes in 10 locations and granting automatically renewable Proactive government policies to boost residence permit for a period of 5 years for expatriate real estate market owners and beneficiaries of real estate..” “The proactive government policies will encourage Qatar’s real estate market, said consulting firm ValuStrat in its third quarter 2019 review report, yesterday. The rents in residential and office sectors became even more competitive during the third quarter of this year. ”

9 | Qatar Real Estate Market 4th Quarter 2019 Review Premium ValuStrat Price Index Subscription Qatar Residential Report Q4, 2019

ValuStrat Price Index Villas Base: Q1 2016=100 70.3

ValuStrat Price Index Apartments Base: Q1 2016=100 75.2 Villa Transaction Volume 441

Gross Yield 5.0%

Price to Rent Ratio - Apartments 17 years

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VPI ValuStrat Price Index

The ValuStrat Price Index for Qatar’s residential sector is constructed to represent the quarterly price change experienced by typical residential units within Qatar. The VPI is a valuation-based weighted price index that uses a data sample representing influential locations across the city and is built by our expert RICS Registered Valuers.

Research Methodology Every effort has been made to ensure the accuracy of this document. New supply data covers all the eight municipalities of Qatar. Only completed and under construction projects are included. The new supply data does not include announced projects, and projects in design phase. The new supply database does not take into account most private building projects. Prices are calculated from actual transactions extracted from the Ministry of Justice data that have been carefully cleansed to exclude duplicates and outliers. Rental data is derived from carefully chosen listings from predetermined areas and districts for commercial and residential properties.

Copyright © ValuStrat LLC 2020 This document is the property of ValuStrat LLC and must not be reproduced or transmitted in any form or by any means, without the prior written consent of ValuStrat LLC. We welcome your constructive feedback and any corrections that may need to be made to this document. ValuStrat LLC does not accept any liability in negligence or otherwise for any damage suffered by any party resulting from reliance on this document.