Demand for office space rises in Q3

November 9, 2022

Doha: The demand for office spaces in Qatar has notched a strong recovery evident by the increase in transactions in the third quarter (Q3) this year, according to Cushman and Wakefield in its third quarter (Q3) report launched recently.

Following a downturn in activity in 2020 and 2021, there has been an increase in office leasing transactions throughout 2022, with a number of office leases agreed in Q3. There has also been a notable increase in the size of office spaces required by tenants in 2022, with a number of recent lettings in excess of 500 square metres (sqm). Recent expansion in the hydrocarbon sector has been behind a recent office acquisition of over 7,000 sqm and two further lettings in excess of 3,000 sqm, the report stated.

Earlier in the year, a number of government and semi government agencies announced their intention to re-locate to buildings that are under construction in downtown Lusail. While this will ultimately lead to buildings in other locations being vacated, it highlights an increasing trend in office occupiers moving to Lusail. Organisations such as Qatar Financial Centre (QFC), and increasingly the Qatar Free Zone Authority have been driving demand for office in the private sector.

“We understand that QFZA designated office accommodation will soon be available to lease to QFZA companies outside of Ras Bufontas, as office buildings within that Free Zone are reaching capacity. An agreement is also in place for QFZA real estate solutions in Msheireb Downtown. To date, more than 300 companies are registered with QFZA and further growth is expected to create further demand for office accommodation in Doha, the real estate consultancy added.

QFC currently has over 60 designated buildings across Doha housing the 1,400 QFC registered companies. This number is also expected to grow over the coming years.

The supply of purpose-built office accommodation in Qatar has now reached approximately 5.3 million sq m. The Al Dafna/West Bay district has the largest concentration of supply with approx. 1.8 million sq m of gross leasable area in more than 70 buildings. Cushman & Wakefield estimate that more than 200,000 sqm of office accommodation is currently available to lease in West Bay.

While rental levels have stabilised somewhat over the past year, rents on average remain more than 50 percent below their 2015 peak. With the office market continuing to feel the impact a huge expansion in supply over the past decade, “we expect the number of new office development projects to reduce in the coming years,” the report said.

Prime rents for Grade A stock range from QR100 to QR110 per sqm per month exclusive of service charges. Office spaces leased as ‘shell and core’ can be secured for QR60 per sqm per month in some of Doha’s main office districts.

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