Qatar Real Estate Market 2021 Review

www.valustrat.com 1st Quarter Market Intelligence. VPI Simplified. ValuStrat Price Index

RESIDENTIAL

The first quarter 2021 ValuStrat Price Index (VPI)-Residential, displayed overall 6.2% annual and 1.5% quarterly declines in capital values. Villa and freehold apartment prices saw quarterly price drops of 1.3% and 2.4%, respectively. Amongst freehold apartments, The Pearl witnessed the sharpest decline in values. Amongst villas, the highest quarterly depreciation of 5.6% in capital values was experienced in cluster. Five locations ( Ali, , The Pearl, Lagoon and ) saw a marginal QoQ change of less than a percent in capital values. The remaining areas experienced quartely falls of between 0.5% to 2.5%. Gross yields for residential units averaged at an overall 5.4%, adjusted by 6.5% for apartments and 4.8% for villas.

VPI - RESIDENTIAL CAPITAL VALUES 13 Villa and 3 Apartment Locations [Base: Q1 2016=100]

120 100.0 96.3

100 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 70.8 69.9 68.3 67.5 66.4

60

40

20

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

2016 2017 2018 2019 2020 2021

Source: ValuStrat

For more details, please visit www.valustrat.com/vpi-qatar

1 | Qatar Real Estate Market 1st Quarter 2021 Review MACRO-ECONOMIC SNAPSHOT

• As per the latest statistics released by the Planning & Statistics Authority (PSA), real QATAR POPULATION 2013-2021 GDP totalled QAR 163 billion during Q4 2020, contracting by 3.9% YoY and 0.5% QoQ

• The International Monetary Fund (IMF) projected the real GDP of Qatar to grow 2.4% during 2021

• As per the Ministry of Public Health, the capacity of vaccinations for COVID-19 has gradually increased, as of March 2021, 130,000 doses have been administered a week

• Population is estimated at 2.64 million, declining 5.4% annually 2,235,000 2,421,000 2,597,000 2,641,000 2,674,000 2,773,000 2,794,000 2,642,000

• The government of Qatar approved two 2,045,000 important draft laws: No. 01; will facilitate 2013 2014 2015 2016 2017 2018 2019 2020 Q1-2021 individuals and companies to obtain bank loans guaranteed by movable assets and No. Source: Planning & Statistics Authority (PSA) 02; mandated health insurance for renewal and issuance of visas for expatriates and visitors • ‘Al-Ula Declaration’ resulted in re-opening of borders, resumption of air and sea travel and trade of Qatar with Saudi Arabia, the United Arab Emirates, CONSUMER PRICE INDEX VS. HOUSING INDEX Bahrain and Egypt January 2019 – YTD • During the first two 105 months of Q1 2021, export revenues reduced by 3.8% YoY, 100 and imports contracted by 14% YoY 95 • During Q1 2021, the Consumer Price Index 90 (CPI) stood at 97.1 points (the base year 2018) indicating a 85 marginal decrease of 1.0% annually and increase of 1.1% QoQ 80 Jul Jul Oct Oct Apr Apr Jan Jan Jan Jun Jun Feb Feb Feb Sep Sep Dec Dec Nov Nov Aug Aug Mar Mar Mar May May • Housing and Utility 2019 2020 2021 Expenses Index decreased 5.5% YoY Consumer Price Index (2018=100) and 1.6% QoQ Housing, Water, Electricity, Gas and Other Fuels

Source: Planning & Statistics Authority (PSA), ValuStrat

www.valustrat.com | 2 RESIDENTIAL SUPPLY

• As of Q1 2021, the total housing stock was QATAR RESIDENTIAL SUPPLY approximately 304,715 units with the addition 2018-2022 of 1,700 apartments and villas (’000 UNITS) 11 • Apartment supply consisted of 1,650 units coming from project handovers in (Fox Hills and Marina District), The Pearl, , 311 Mirqab Al Jadeed and Fereej Abdul Aziz 8 303 298 303 • Contracts of residential buildings were 290 awarded during the quarter in Lusail Waterfront, Marina and Fox Hills, estimated to add 450 units by the end of 2022

• 6,300 units are currently in the pipeline for the remaining quarters of 2021

2018 2019 2020 2021E 2022E

Existing

Expected Supply*

* May be subject to significant downward adjustment depending on construction delays

Source: Planning & Statistics Authority (PSA), MEED Projects, VauStrat

RESIDENTIAL SALES

• The median transacted ticket size for RESIDENTIAL MEDIAN TRANSACTED residential houses was QAR 2.7 million, TICKET SIZE increased by 3.4% quarterly and 6.8% annually

• Transactional volumes for houses declined 3.3% quarterly, but were 52.8% higher when compared to the same period last year 6.8% 6.8% Last 2 Years Last Year • Amongst all areas, Umm Garn had the highest volume of transactions for residential houses and Fereej Al Amir had the highest ticket size

• 68 transactions were recorded for residential 6.8% 3.4% buildings, as Old Airport and Last 6 Months Last Quarter had the highest number of transactions

Source: Ministry of Justice, ValuStrat • During the first two months of 2021, volume and value of transactions in The Pearl and fell 6.8% and 11.7% annually respectively

3 | Qatar Real Estate Market 1st Quarter 2021 Review RESIDENTIAL PERFORMANCE

• The median monthly asking rent for residential RESIDENTIAL MEDIAN ASKING RENTS units dropped 1.8% QoQ and 5.7% YoY

• Villa rents continue to reduce at a slower pace compared to apartment rents which have experienced rapid drops over the last year -10.4% -5.7% • The median monthly asking rent for Last 2 Years Last Year apartments was QAR 6,290, declining 1.9% quarterly and 6% annually. Three-bedroom apartments experienced the highest quarterly falls in rent of up to 5.3%

• West Bay, and experienced the highest quarterly -2.4% -1.8% Last 6 Months Last Quarter drops in rents varying 3.5% to 5% Source: ValuStrat • The median monthly asking rent for villas was QAR 10,460, which fell by 1.2% QoQ and 3.9% YoY. 3-bedroom villas experienced the highest quarterly drop in rents of up to 2.8%

• Villas in compounds in and Ain Khaled experienced the highest QoQ rental falls by an estimated 3.3%

MEDIAN MONTHLY ASKING RENT (QAR) AND QUARTERLY CHANGE (%) Apartments Villas

4,250 7,000 Al Mansoura 5,250 0% Al Wakrah 7,750 0% 6,000 10,500

5,250 8,750 Lusail 7,000 0% Al 10,500 0% 7,500 11,500

5,250 9,000 6,250 -2% 11,500 0% 8,250 13,000

6,500 11,500 Fereej Bin 6,750 -2% 12,000 0% Mahmoud 7,750 13, 250

7,750 17,500 West Bay The Pearl 10,000 0% 18,500 -1% Lagoon 12,000 20,000

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

Source: ValuStrat Source: ValuStrat

www.valustrat.com | 4 OFFICE SUPPLY

• As of Q1 2021, the supply of office space was OFFICE SUPPLY 5.5 million sq m Gross Leasable Area (GLA). 2018-2022 Moreover, 62% of the existing stock was of (Million sq m GLA) Grade-A

• Seven office projects were added this quarter 0.8

in Lusail, Ain Khaled (Salwa Road), Fereej 5.4 0.6 6.0 Abdul Aziz, Old Airport, Al Muntazah and 5.4 Msheireb comprising of 145,000 sq m GLA 4.8 4.1 • Upcoming projects till 2022, currently under development totalled 1.28 million sq m GLA, 62% of which is located in Lusail (Fox Hills, Energy City, Commercial Boulevard and Marina District) and the remaining mixed amongst Umm Ghuwailina, Al Hitmi and Al Dafna

2018 2019 2020 2021E 2022E

Existing Stock Expected Supply

Source: MEED Projects, ValuStrat

OFFICE PERFORMANCE

• Median office asking rents fell 6% YoY and 2% OFFICE MEDIAN ASKING RENT QoQ (QAR/SQ M/MONTH) AND QUARTERLY • The median monthly office asking rent in CHANGE (%) West Bay was QAR 110 per sq m, with quoted rents ranging from QAR 70 to 190 per sq m 0% 0% 0% -2% -4% -1% 0% • Offices in Al Sadd experienced the highest quarterly fall in asking rents up to 4%, with rates varying from QAR 50 to QAR 110 per sq m

• Secondary office locations saw larger declines this quarter in comparison to prime locations

• Offices in Al Wakrah and ranged from QAR 40 to QAR 60 per sq m

110 85 84 78 72 72 72 • The average asking price for offices in Lusail West C/D Ring Lusail Citywide Al Sadd Grand Hamad Salwa and West Bay was QAR 17,500 per sq m on Bay Road Avenue Road sellable area Median Asking Rate (QAR/sq m) Quarterly Change (%)

Source: ValuStrat

5 | Qatar Real Estate Market 1st Quarter 2021 Review RETAIL SUPPLY

• As of Q1 2021, the supply of organised retail RETAIL MALLS AND SHOPPING CENTRES space totalled 1.93 million sq m GLA with (‘000 sq m GLA) completion of the re-development work at City Centre 337 • 202,000 sq m GLA of organised retail space is in the pipeline for 2021, including Boulevard

Mall in , 04 Mall in The Pearl 981

and Doha Mall in Al Maamoura 102

• New regional and international food & 703 beverage and fashion brands opened stores in the Mall of Qatar including Maia lounge, Mestooran restaurant, Kaldi Café and Bianca 202 Nera 40 • Al Meera (58th branch) and Daiso Japan (7th branch) opened their stores in Al Asmakh Mall and Mirqab Mall respectively, both spread over an area of 1,000 sq m

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 2022) Source: ValuStrat

RETAIL PERFORMANCE

• With the continuation of the pandemic and DISTRIBUTION OF GLA OF SHOPPING restrictions on social mobility, challenges CENTRES/MALLS ACROSS MUNICIPALITIES associated with oversupply continue to exacerbate occupancy and rents in organised 3% 15% and unorganised retail outlets

5% 30% • The median monthly asking rent in shopping centres remain unchanged QoQ and fell by 4.3% YoY 5%

• The median monthly asking rent among street retail inside Doha was QAR 165 per sq m, declined by 3% QoQ and 8% YoY

• The median asking rent among street retail units outside Doha was QAR 155 per sq m, falling by 6% QoQ and 9% YoY 42% • Faster absorption of listings of street retail was seen in areas of Ain Khaled, Abu Hamour Al Wakrah and Old Airport compared to Lusail, Fereej Doha Bin Mahmoud and shops along Salwa Road Umm Salal Al Khor which experienced an increase in vacant Source: ValuStrat spaces available for rent

www.valustrat.com | 6 HOTEL SUPPLY

• As per ValuStrat research, the total supply of HOTEL ROOM SUPPLY hotel rooms and apartments stood at an 2018 -2022 estimated 29,075 keys during Q1 2021 (’000 KEYS) 5.2 • Hilton Salwa Beach Resort (361 rooms and villas) 7.0 35.6 along Salwa Road, and Jouri Murwab Hotel (134 rooms) were unveiled this quarter adding a total 28.6 27.3 28.6 of 495 rooms 25.8 • Chedi Katara Hotel & Resort in Katara Cultural Village and Four-Seasons Private Residence in The Pearl were launched, to add 91 and 416 units respectively once completed by 2022 • Hayri Atak Architectural Design Studio announced an eco-friendly, rotating and floating 5-star hotel to open by 2025 adding 152 rooms

upon completion 2018 2019 2020 2021E 2022E • Katara Hospitality announced Fairmont and Raffles Hotel (Accor) to operate landmark Hotel & Hotel Apt Rooms towers in Lusail, expected to add 493 keys upon Expected Supply completion by 2022 Source: Qatar National Tourism Council (QNTC), ValuStrat • Qatar is expected to receive 5,750 hotel keys and 750 hotel apartments during the remaining quarters of 2021

HOTEL PERFORMANCE

• Amidst the pandemic, the number of arrivals was limited due to restrictions on inbound tourism. During the first two months of 2021, the total number of visitor arrivals in Qatar was 27,759, SOURCE OF QATAR VISITORS BY REGION February 2021 - YTD down by 94% compared to February 2020

3.5% • Boosts to tourism expected from re-opening of borders and travel with Saudi Arabia, the United 20.3%

Arab Emirates, Bahrain and Egypt 21.3%

• 47.6% of tourist arrivals were from Asia followed by Europe and GCC 6.6%

• Average occupancy of hotels was 64% during 0.7% February 2021, up by 2% compared to February 2020. Mandatory hotel quarantine and “Staycations” boosted occupancy

• 60 hotels were designated for travellers for

quarantine upon return to Qatar. 85,000 47.6% returning travellers booked during March 2021 as per Discover Qatar GCC Other Asia inc/Oceania • The Average Daily Rate (ADR) for hotels and hotel Other Arab Europe apartments increased by 9.3% YoY and 11.2% Other Africa Americas YoY respectively Source: Qatar National Tourism Council (QNTC), ValuStrat

7 | Qatar Real Estate Market 1st Quarter 2021 Review INDUSTRIAL INVESTMENT / SUPPLY

• During January 2021, manufacturing output INDUSTRIAL PRODUCTION INDEX declined 2.8% compared to December 2020 Jan 2020 – YTD and 1.7% compared to January 2020, as per the latest Industrial Production Index 120

published by MDPS 115 • Qatar Free Zones have become attractive destinations for international and local 110 investment 105

• 1,500 electric buses will be manufactured in 100 the Free Zones starting from Q4 2022 • Gulf Warehousing Company (GWC) 95 inaugurated logistics hub, the first company 90

to start operations in Ras Bufontas Free Zone 85

• Ali Bin Ali Holding announced to set up a Jul Oct Apr Jan Jan Jun Feb Sep Dec Nov Aug Mar May 3,000 sq m production facility for laptops in 2020 2021 Umm Al Houl (Qatar Free Zone) projected to

complete by August 2021 IPI (2013=100) Manufacturing Mining and Quarrying • Gulf Agency Company (GAC) has signed a Source: Planning & Statistics Authority (PSA), ValuStrat contract with Qatar Free Zone Authority to establish a 27,000 sq m logistics facility and office in the Ras Bufontas area by Q1 2022

INDUSTRIAL PERFORMANCE

• The COVID-19 pandemic resulted in local and • The average asking rent for dry/ambient regional businesses diversifying sourcing that led warehouses in Qatar reduced by 6% QoQ and to additional demand for industrial facilities, increased by 15% YoY however, at the same time there was a temporary reduction in container flows at major gateway • The average asking rent for cold storage being ports. As per PSA, during the first two months of leased unit wise was QAR 12,000 per month with 2021, the net tonnage of bulk cargo reduced by an average size of 60 sq m in the Doha Industrial 20% YoY Area

• The pandemic provided a boost to e-commerce, • 30 sq m containers were offered on a monthly as per the Ministry of Transport and basis for QAR 3,500 per month in Umm Salal Communication there was an increase of 144 new websites (allowing companies to trade online) compared to last year, leading to a total of 494 websites

80

65 WAREHOUSE ASKING RENTAL RATES 50 (QAR/sq m) 45

20 20 15 12 Rent High

Rent Low

Source: ValuStrat Umm Salal Wukair New Old Industrial Area

www.valustrat.com | 8 IN MEDIA

8th March, 2021 25th February, 2021 Qatar expected to receive 7K hotel rooms in Residential stock in Qatar at 303,015 units at 2021: ValuStrat end-2020: ValuStrat

“Qatar is expected to receive 7,000 hotel rooms “Residential stock in Qatar stood at 303,015 units at the including 6,250 keys and 750 serviced apartments in end of 2020 with the addition of some 530 units during 2021, ValuStrat has said in its ‘Qatar 2021 Outlook’ the last quarter of the year, researcher ValuStrat has report released on Sunday. According to the report, said in a report. Despite Covid-19 and the slowdown in hospitality establishments like The Plaza Doha, Katara the growth of expatriate population, the annual fall in Towers, Waldorf Astoria, Zulal Wellness Resort, Salwa rents and capital values of residential units during 2020 Beach resort, Jouri Murwab Hotel, Steigenberger was less compared to year-on-year (YoY) decline in Hotel, Banyan Tree Doha, JW Mariott Hotel, Al Baker 2019...” Novotel and Sofitel, Majlis Grand Mercure Hotel & Apartment and Dream Doha are expected to start operations by the end of this year...”

22nd February, 2021 21st February, 2021 Over 8,000 residential units for homebuyers Pick-up in real estate demand seen with this year predicted growth in Qatar’s population: ValuStrat “Qatar’s real estate sector is set to stage a strong recovery this year with addition of more residential “Growth in Qatar’s expatriate population is predicted to units. Around 8,200 residential units are expected to rise in the second half of 2021, post lifting of social enter market in 2021, offering more choices to mobility restrictions, resulting in a pick-up in real homebuyers. A major portion of the new supply will go estate demand, researcher ValuStrat has said in a to Lusail, The Pearl-Qatar and West Bay. Residential report. This, ValuStrat said, could head towards supply for 2021 is estimated at 8,200 units. stabilisation of rents by the end of 2021…” Approximately 80 percent of the upcoming supply is concentrated in Lusail, The Pearl and West Bay...”

9 | Qatar Real Estate Market 1st Quarter 2021 Review Market Intelligence. VPI Simplified. ValuStrat Price Index

ValuStrat offers premium subscription reports for PREMIUM Clients allowing them to access to in-depth, SUBSCRIPTION statistical analysis of what is happening in residential real estate; allowing for more informed ValuStrat Price Index decision making and forward planning. The full in-depth 70+ page Qatar report includes citywide Qatar Residential In-Depth Reports analysis of freehold districts, including the ValuStrat Price Index, transaction volumes, service charges, Price to Rent Ratios and Net Yields.

ABOUT VPI The ValuStrat Price Index for Qatar’s residential sector is Subscribe 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 for regular market intelligence 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 For subscription, please visit . Only completed and under construction projects are included. The new supply data does www.valustrat.com/vpi-qatar not include announced projects, and projects in or email at design phase. The new supply database does not take [email protected] 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. Also accessible via

www.valustrat.com | 10 ABOUT

ValuStrat Qatar is part of a leading consulting firm PAWEL BANACH, FRICS Strategic Partners of providing Advisory, General Manager Valuation, Research, Due [email protected] Diligence, and Divestment services Financial Institutions across a diverse range of industry sectors since 1977. ValuStrat’s office HAIDER TUAIMA network provides Head of Real Estate Research services to over 1,000 corporate clients including [email protected] financial institutions, local corporates, multinationals, governments, SMEs, family businesses and start-ups. Some of the key sectors serviced by ValuStrat’s consulting team include real estate, hospitality, healthcare, education, manufacturing, retail, entertainment, transport, and ANUM HASAN FMCG. ValuStrat is a Royal Institution of Chartered Market Research Manager [email protected] Surveyors (RICS) Regulated Firm and the first company head quartered in all of MENA and Asia to be accepted into the prestigious RICS Tech Affiliate program.

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