REVIEW

VISION

Qatar

www.valustrat.com ValuStrat Price Index - VPI Residential Base: Q1 2016 = 100 All prices are quoted in Qatari Riyal unless otherwise stated Sales and Rent performance are measured on quarterly basis while hotel performance are on yearly basis

Q12019 REVIEW Review 2018 Residential • 2018 real GDP grew by 1.5% • 13,000 residential units projected to be completed in 2019, of which 3,000 were delivered • Qatar Central Bank increased deposit rates by 25 basis points each quarter to 2.5% by year end • Influx of supply induced landlords to offer rent-free period of up to 3 months and were common in , • 4,186 real estate transactions worth QAR 24.27B, per Al Wakrah, , The Pearl, New etc Ministry of Justice • Geo-political situation adversely impacted tourism; resulting in 20% fall in visitors compared to 2017 VPI Residential Residential Sales Residential Sales Residential Median Capital Values Ticket Size Volume Monthly Asking Rent 73.4 2.5m 505 9,800 - QAR - QAR

-2.2% -7.4% 10.7% -2.0% Hotel Q1 Q-o-Q Q1 Q-o-Q Q1 Q-o-Q Q1 Q-o-Q • Mandarin Oriental Doha, Dana Al Saad, VIP hotel, Dusit Doha and M Gallery were unveiled adding 1,070 Tourism keys • Total number of visitors increased by 10% YoY to 588,000

Office Median Monthly Asking Rent 98 Retail QAR/sq m • Average occupancy across malls was estimated at Economy 80%

• Real GDP grew 0.9% YoY, as per Planning & Statistics -6.0% (PSA) Q-o-Q

Legal • Government of Qatar passed a new law which legalised freehold ownership for various asset Office Warehouse Monthly classes (including shops, offices and residential villas Asking Rent • 1 million sq m GLA was projected to complete in in a compound) in 10 locations 2019, of which 200,000 sq m were completed 36 • Government also passed a law granting up to 100% QAR/sq m • Majority of the office demand has been generated by foreign ownership in investments across all sectors, existing companies looking for reduced rents and as well as providing entry support for new companies better incentives. An emerging flight to quality was evident as quarterly falls in rental values appeared -2.0% steeper in secondary locations compared to prime locations Q-o-Q

Hotel Average Hotel Daily Rate Occupancy 366 69% QAR -

-6.0% 10.0% Q1 Y-o-Y Q1 Y-o-Y

Q22019 REVIEW Economy Hotel • Real GDP contracted by 1.4% YoY, driven by a fall in • Hotel visitors totalled 1.05 million during first six the hydrocarbon sector months of 2019 • Intercontinental Hotels Group launched a boutique hotel, ‘Hotel Indigo’, projected to add 200 rooms by 2023 in Lusail • Al Rayyan Tourism Investment Company (ARTIC) rebranded Shangri-La Hotel as JW Marriot Marquis VPI Residential Residential Sales Residential Sales Residential Median City Centre Doha (314 rooms) Capital Values Ticket Size Volume Monthly Asking Rent 72.8 2.8m 378 9,675 Infrastructure - QAR - QAR • Red Line was launched, 13 stations from Al Wakrah in the south to in the north were made operational -0.8% 12.0% -14.0% -1.5% Q2 Q-o-Q Q2 Q-o-Q Q2 Q-o-Q Q2 Q-o-Q

Tourism • Grand opening of National Museum of Qatar

Residential Office Median • A mix of 1,700 apartments and villas were added this Monthly Asking Rent quarter. Majority of the apartment were concentrated in The Pearl, Lusail and Musheireb. 94 QAR/sq m • Median transacted size for houses increased which Industrial was attributed to larger ticket sizes of housing transactions experienced in areas such as Al • Qatar Petroleum announced Barzan Gas project to be Kharaitiyat, , Lusail, Abu Hamour and operational by end of 2019, increasing gas production Madinat Al Khalifa -4.0% by 2 billion cubic feet per day once fully completed Q-o-Q

Office Warehouse Monthly Retail Asking Rent • Highest quarterly falls were experienced in • Galleries Lafayette (4,350 sq m GLA) announced a secondary locations such as Salwa Road and Grand 34 soft opening of its flagship store within Katara Hamad Avenue QAR/sq m Cultural Village • The median asking rent in Lusail and was • Amid competition from newly opened super regional QAR 100 per sq m and QAR 125 per sq m respectively, malls, relatively older shopping centres have reduced with an estimated 750,000 sq m GLA office space asking rents by an estimated 5% YoY in order to remaining in vacancy out of 2.1 million sq m in stock -5.0% maintain occupancy Q-o-Q

Hotel Average Hotel Daily Rate Occupancy 370 65% QAR -

-5.0% 8.0% Jan-June Y-o-Y Jan-June Y-o-Y

Q32019 REVIEW Population Hotel • Population as of September 2019 was 2.75 million • 7 new properties opened, adding a 1,436 new hotel rooms leading to a total 26,778 by end of Q3 2019. Two 5-star properties (Four Seasons Doha and Doha Marriot) temporarily closed for renovations

VPI Residential Residential Sales Residential Sales Residential Median Capital Values Ticket Size Volume Monthly Asking Rent Legal 71.8 2.6m 371 9,500 - QAR - QAR • Government of Qatar amended some provisions of law no. 21 (2015) by granting automatically renewable Residential residence permit for a period of five years for expatriate investors who are owners and -1.4% -6.0% -8.0% -1.6% • 1,250 residential units (apartments and villas) were beneficiaries of real estate(renewable for the added this quarter. The United Development duration of ownership) Q3 Q-o-Q Q3 Q-o-Q Q3 Q-o-Q Q3 Q-o-Q Company (UDC) launched Floresta Gardens in The Pearl, projected to add 10 mid-rise residential towers • The US Federal Reserve reduced interest rates a and 114 villas quarter point twice, Qatar Central Bank followed suit • The Pearl, West Bay and Lusail saw median monthly asking rents decline 8% annually. Occupancy in The Pearl increased as a result of declining rents and various incentive offered

Office Median Monthly Asking Rent 87 Retail QAR/sq m • Al Waddan Mall (26,000 sq m GLA) in Messaieed (Al Wakrah), The Galleria and Department Store (15,000 sq m GLA) in Mushiereb Downtown (Doha) -7.0% Tourism • Events such as ‘Summer in Qatar’’and Eid Al Adha, as Q-o-Q • Tourist count totalled 1.49 million YTD, up by 12% YoY well as outbound resident spending habits, contributed towards increased sales and footfall during the quarter

Warehouse Monthly Asking Rent Office 34 • Existing over supply and further quarterly influx of Sale Activity new commercial office spaces induced the most QAR/sq m significant QoQ fall in rents in Lusail to QAR 90 per • 2,818 real estate transactions with a total value of sq m per month QAR 15.3 billion, as per Ministry of Justice 0.0% Q-o-Q

Hotel Average Hotel Daily Rate Occupancy 369 64% QAR -

-4.0% 8.0% Jan-Sep Y-o-Y Jan-Sep Y-o-Y

Q42019 REVIEW Economy Tourism • International Monetary Fund (IMF) projected real GDP • Tourist count totalled 1.67 million till October 2019 to grow by 2.0% on the back of robust YTD, up by 12.8% annually compared to same period non-hydrocarbon growth and recovery in oil and gas in 2018 production • As per IMF data, Qatar has the lowest fiscal break-even oil price ($48.8 per barrel) projected for 2019 compared to all oil exporter countries. This provides cushion for spending as projected oil price for 2019, as per World Bank, is $70 per barrel VPI Residential Residential Sales Residential Sales Residential Median Capital Values Ticket Size Volume Monthly Asking Rent 71* 2.5m* 400* 9,300* - QAR - QAR Hotel • Park Hyatt in Musheireb Downtown and Hilton -1.0% -3.0% 8.0% -2.0% Double Tree in Al Sadd opened adding 326 rooms to Q4 Q-o-Q Q4 Q-o-Q Q4 Q-o-Q Q4 Q-o-Q the total stock • Rosewood Hotels & Resorts launched in Lusail , Cityscape * estimated projected to add 185 rooms, 173 serviced apartments and 300 standard apartments once completed in 2022 • Notable mixed-use projects launched including Expansion of Hamad International Airport, Qetaifan • Fraser Suites (357 rooms) in rebranded as Al Island North Phase 1 in Lusail, Gewan Island in The Rabban Suites West Bay Doha Pearl, Floresta Garden in The Pearl and Al Khail in Musheireb Downtown

Office Median Monthly Asking Rent 84* QAR/sq m Office Transactions • Quarterly influx of supply induced landlords to reduce asking rents and offer further incentives in the form • During first two months of Q4 2019, real estate -3.0% Q-o-Q of rent –free period up to 4 months (differing contract transactions totalled 700 with value of QAR 5.9 billion, periods) up by 34% compared to same period in 2018 * estimated

Infrastructure Industrial Warehouse Monthly Asking Rent • Gold Line (11 stations) starting from Ras Bu Abboud • Barwa Real Estate announced completion of to Al Aziziya, Green Line (11 Stations) connecting construction of Barwa Al Baraha project comprising 33* from to Al Riffa and remaining stations 561 warehouses (300 sq m each) and 118 workshops QAR/sq m of Red Line including Hamad International Airport, (144 sq m each) Lusail, Qatar University and Katara were launched

-3.0% Q-o-Q

* estimated

Hotel Average Hotel Daily Rate Occupancy 371 65% QAR -

-3.0% 5.0% Jan-Oct Y-o-Y Jan-Oct Y-o-Y

Retail Industrial • Upcoming malls: J Mall in Al Markhiya, La Plage 04 • QAR 1.6 billion Hamad Port Food Security Project Mall in The Pearl and Doha Mall in Al Maamoura covering 530,000 sq m development area, comprising of storage facilities, silos, reservoirs and specialized • Retail performance in terms of occupancy is industrial facilities for processing, manufacturing and projected to improve due to temporary increase in refining of rice, sugar and edible oil is projected to demand as World Cup 2020 nears, especially for complete shopping centres which are introducing anchor tenants from entertainment and speciality Food & Beverage to draw footfall

Economy • IMF projected real GDP to grow by 2.8%. Inflation rate Office is estimated to remain modest at 2.2% and current account surplus is expected at 4% of GDP. As per • 65% of the projected 1 million sq m GLA in pipeline World Bank, Oil prices are projected to average $62 for 2020 is concentrated in Lusail. This is expected to per barrel continue to put pressure on rents in the area • The state budget for 2020 was announced which forecasted a budget surplus of QAR 500 million, amidst a continued conservative oil price estimate of $55 a barrel • Expenditure in major projects has been budgeted at QAR 90 billion of which infrastructure projects accounted for the largest share

Population • World Bank projected population will grow to 2.88 M in 2020

Hotel • Upcoming hotels: Zulal Wellness Resort, Panaroma Residences and Suites, Plaza Rayhaan, Pullman Hotel, Samrya Quartier Hotel & Apartments, The Plaza Doha, The Vyra and Aleph Residences Doha Residential • Due to expected rise in visitors and fall in room rates, • Supply projections for 2020 have adjusted upwards to it is projected occupancy will continue to rise across 10,000 units due to delayed deliveries in 2019. 70% of all hotel categories the supply is projected to launch in prime locations such as Lusail, The Pearl and which might negatively influence the market rent in the areas once projects are handed over. Vacancy in secondary locations may increase as residents 'trade up' • Capital values of low-quality villas outside Doha may experience downward pressure as a result of increasing competitiveness of villas in prime locations VPI ValuStrat Price Index