Qatar Real Estate Q1, 2020
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Qatar Real Estate Q1, 2020 www.alasmakhrealestate.com Indicators Q1 2020 Micro Economics – Current Standings Steady increase in population partially supports the deMand for housing. Delay in delivery of under Total Population* GDP at Current Price* construction projects is expected due to outbreak of pandeMic in the region. 2,795,484 QAR 163.45 Billion Office supply in new CBD areas mounts pressure on * Mar 2020 * Q2 2019 price correction in old town business districts. Operation of Doha Metro in the vicinity of priMe Malls Industrial adds on to increased footfall. Producer Price Index* Production Index* GovernMent supports hospitality sector by 61.4 points 109.6 points converting hotels to quarantine centers. Ref: QSA * Sep 2019 * Aug 2019 Overall land rates are stabilizing across Qatar. No of Properties Sold Municipalities 923 Value of Properties Sold Al Shamal QAR 6.06 Billion Al Khor Ref: MDPS For the period December 2019. January 2020 and February 2020 Al Daayen Real Estate Price Index (QoQ) Umm Slal Doha 300 8.0% Al Rayyan 250 6.0% 4.0% 200 2.0% 150 0.0% -2.0% Al Wakra 100 -4.0% 50 -6.0% 0 -8.0% Jul-17 Jul-18 Jul-19 Jan-17 Jan-18 Jan-19 Sep-17 Sep-18 Sep-19 Mar-17 Nov-17 Mar-18 Nov-18 Mar-19 Nov-19 May-17 May-18 May-19 Ref: QCB 2 Residential Q1 2020 YTD Snapshot Supply in Pipeline Expected Delivery Overall Available Units 360,000 90,000 units 2020 Q1 2020 Villa Occupancy 72%* Median Selling Price Median Rental Rate ApartMent Occupancy QAR 10,500 PSF QAR 6,500 (2BR) 60%* Ref: AREDC Research Current Annual Yield Key DeMand Drivers 4.9%* * Average 25% 13% GovernMent Companies Residential Concentration GovernMent and coMpanies are taking residential units for their employees under HRA. Residential Supply (Units) – YoY Comparison 500,000 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 - 2015 2016 2017 2018 2019 2020 Ref: AREDC Research 3 Residential Q1 2020 Residential Market Gauge Apartment Snapshot Rental Rate* Sale Price* Q4 19 Q1 20 Micro markets (QAR/Month)** (QAR/PSM) Unit Sales The Pearl 11,000 11,000 Rental Trend West Bay 10,000 8,500 Occupancy Lusail 7,500 11,000 Overall Market C&D Ring Road 5,500 12,500 Downtown 5,000 12,500 Al Wakra 4,000 -- Al Khor 4,500 -- Ref: AREDC Research * Average ** For standard 2BR unit Market Outlook Apartment Rental Rates in Prime Areas The residential segment in Qatar 16,000 witnesses surge in inventory from 14,000 newly developed micro markets 12,000 10,000 towards northern peripheries of 8,000 Doha. Additionally well connected 6,000 4,000 roadway corridors to the vicinity to 2,000 0 the central districts of Doha has The Pea rl West Bay Lusail Al Sadd Bin Omran Al Old Al Al Wakrah Mansoora Airport Muntazah worked wonders. Due to affordable Studio 1 Bedroom 2 Bedroom 3 Bedroom inventory available in the newly Ref: AREDC Research developed locations, pressure to sustain rentals and occupancy Rental Rates of Villas in Residential Compounds in Prime Areas mounts on the existing 35,000 neighborhoods. Average rentals 30,000 dips around 3% across all asset 25,000 classes in the residential segment 20,000 15,000 as compared to the previous 10,000 quarter Q4 2019. However 5,000 residential communities that are 0 West Bay Al Waab Ain Khalid Abu Hamour Al Hilal Al Gharrafa professionally maintained are able Lagoon to hold up the sustenance. 3 Bedroom 4 Bedroom 5 Bedroom Ref: AREDC Research 4 Office Q1 2020 YTD Snapshot Supply in Pipeline Expected Delivery Total Leasable Area 4,800,000 sq.m 400,000 sq. m 2021-22 Q1 2020 Estimated Leasable Area 5,200,000 sq.m Median Rental Rate Common Grading Occupancy QAR 100 PSM Class B 65%* Ref: AREDC Research Current Annual Yield Key Demand Drivers 6.2%* * Average Affordable Better Rental Leasing Terms Office Concentration Class A office spaces are now affordable due to easy rental terms and lucrative rental rates. Office Supply (sq.m) – YoY Comparison 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 - 2015 2016 2017 2018 2019 2020 2021 2022 Ref: AREDC Research 5 Office Q1 2020 Office Market Gauge Office SnapsHot Monthly Rental Q4 19 Q1 20 Occupancy Micro markets Rate (%)* Rental Trend (QAR/sq.m)* Occupancy West Bay 120 67% Sentiments C Ring Road 80 70% Overall D Ring Road 70 65% Market Al Sadd 90 73% Salwa Road 70 58% Airport Road 90 65% Old Slata 80 60% Ref: AREDC ResearcH * Average Market Outlook Office Sizes (sq.M) in PriMe Areas The office segment yet to stabilize 700 occupancies and monthly rentals. 600 Surplus Office supply in Lusail City 500 and Musheireb Downtown shifts 400 300 the momentum towards price 200 correction in the existing Business 100 District.. The occupancies in West 0 West Bay C Ring D Ring Al Sadd Salwa Road Airport Old Slata Bay offices towers is in the range Road Road Road of 55% to 65% while asking Ref: AREDC ResearcH monthly average rental ranges from QAR 100 to QAR 140 per sq. Average Occupancies (%) – By Grade m. The Suburban Business District (SBD) as in Doha downtown, C & D 80% 70% Ring road, Al Sadd, Salwa Road 60% 50% and Airport Road are commanding 40% monthly rentals ranges between 30% 20% QAR 70 to QAR 90 per sq. m while 10% the average occupancies in SBD is 0% West Bay C Ring D Ring Al Sadd Salwa Airport Old Salata around 65% Road Road Road Road Grade A Grade B Ref: AREDC ResearcH 6 Retail Q1 2020 YTD Snapshot Supply in Pipeline Expected Delivery TotAl Net LeAsAble AreA 2,100,000 sq.m* 700,000 sq. m 2021 Q1 2020 OperAting MAlls 25 Upcoming MAll Median Rental RAte OverAll OccupAncy 06 QAR 225 PSM 78%** Ref: AREDC Research MediAn Mall Size Key DemAnd Drivers 55,000 sq.m* (NLA) * * *AverAge Including upcoming mAlls StAbilized Brand OccupAncy Retention Retail Concentration Most operAtionAl mAlls hAve higher And stAbilized occupAncy thAt support the mAll’s rentAl income And its stAbility. Net Leasable Area Distribution 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% VillAggio Th e MAll Gulf MAll Th e GAt e DohA MAll DohA LandmArk No rth gAte Mu sh ei r eb … Th e Cent re EzdAn MAll TawAr MAll HyAtt PlAzA RoyAl PlAzA RoyAl Centrepoint Mi r qAb Mal l Ma ri nA Mal l Al SAdd MAll SAdd Al DrAgon DrAgon MAll Ma ll of QAt Ar LagoonA MAll LagoonA FestivAl… DohA B SquAre MAll SquAre B Vendome MAll Vendome BarwA Al DohA Al BarwA Al WAkrAh MAll WAkrAh Al Med inA Centr Al e DohA MAllOutletDohA City Center DohA City DAr Al SAlAm MAll SAlAm Al DAr Ref: AREDC Research 7 Retail Q1 2020 Retail Market Gauge Retail Snapshot Showrooms Q4 19 Q1 20 Year Shopping Mall* (Street Shopping)* Rental Trend 2014 240 160 Occupancy 2015 250 140 Sentiments 2016 270 145 Overall Market 2017 260 140 2018 250 145 2019 240 140 Q1 2020 240 120 Ref: AREDC Research *Average Monthly Rental Rates (QAR/sq.m) Market Outlook Average Monthly Rentals in Prime Malls (QAR/sq. m) The highest concentration of the 350 malls is on Al Shamal Road where 8 300 250 malls are located with net leasable 200 area of 721,250 sq.m that is closed 150 to 33% of total net leasable area. 100 50 The monthly rental rates in the well 0 established malls are in the range of Qatar Mall Mall of Mall Villagio Doha Lagoon a Doha The Gate The Gulf MallGulf Land mark QAR 200 to QAR 250 per sq.m. The City Cen ter Tawar Mall Tawar Festival City Festival Mirqab Mall Mirqab recent launch of Doha Metro Ref: AREDC Research connects many premium and region malls that offers higher Leasable Area in Operating and Upcoming Malls sq.m footfalls to the malls and easy access to the visitors. In upcoming 2 years, the expected supply of about 634,000 sq.m that is 42% of the current NLA is expected from 5 under construction mall. Ref: AREDC Research 8 Hospitality Q1 2020 YTD Snapshot ADR RevPAR Present Keys 28,903 QAR 306* QAR 211* Q1 2020 Under-construction 3,280* Keys Occupancy Arriving Visitors Planned 72%* 498,528** 4,780* Keys * Quarterly average of 5, 4 & 3 star categories Ref: MDPS ** Year till February 29th Current Annual Yield Key Demand Drivers 7.5%** * Independent data. Regularly updated based on our research. ** Average Qatar Government Tourism Initiative Hotel Concentration Government initiatives to support healthcare by temporarily setting up COVID 19 quarantine facilities in 5 & 4 star hotels and visa-on- arrival from 80 countries uphold the hospitality sector in Qatar. Distribution of Arriving Visitors by Region 10% 9% 7% 2% American European Asian & Oceania Other African 42% Other Arabs 31% GCC Ref: MDPS 9 Hospitality Q1 2020 Hospitality Market Gauge Hotel SnapsHot Q4 19 Q1 20 Category No. of Hotels No. of Keys ADR Luxury Class 21 5,757 RevPAR Upper Upscale Class 24 6,345 Occupancy Upscale Class 11 2,168 Overall Market Upper Midscale Class 23 4,610 Midscale Class 26 3,526 Economy Class 38 6,497 Total 143 28,903 Ref: AREDC ResearcH Market Outlook ADR Tracker QAR The previous two quarters 600 witnessed the launch of around 10 500 hotels and hotel apartments.