Posted inFeaturesMarket insights

Qatar: Retail rents outside malls stabilise after early 2024 spike

In Doha, the average asking rent for shops has declined from QAR 214 per square metre in Q4 to QAR 182 per square metre in Q1

Qatar: Retail rents outside malls stabilise after early 2024 spike

According to an analysis conducted by Qatar’s online real estate marketplace hapondo, the average asking rents for retail spaces outside malls in Q1 2024 have reverted back to Q3 2023 levels after experiencing a temporary increase in Q4 of the previous year. In Doha, the average asking rent for shops has declined from QAR 214 per square metre in Q4 to QAR 182 per square metre in Q1, slightly higher than in Q3. In the well-known commercial district of Al Sadd, the average rent has been decreasing for the past two quarters and now stands at QAR 157 per square metre in Q1.

In the first quarter of the year, Lusail experienced a 2% decrease in the average asking rent for available shops, which now stands at QAR 195 per square metre. Conversely, Umm Salal saw a 9% decline in asking rent from QAR 230 to QAR 209 per square metre. The only exception to this trend was Al Rayyan, where the average asking rent has been steadily increasing for two consecutive quarters, rising from QAR 205 per square metre in Q3 2023 to QAR 228 per square metre in Q1 2024. This upward trend reflects a renewed confidence in tenant demand within the Al Rayyan area.

Ahmad Al-Khanji, Chief Executive Officer of hapondo explains, “In Q4 last year, we saw the average rents of shops increase in several places in Qatar on the backdrop of two themes. Firstly, landlords were quite optimistic about retail activities due to the upcoming AFC and other events in early 2024. Secondly, we saw our Doha shop listings doubled in number in Q4 and at higher rates–evidence of spaces that were likely rented during the FIFA World Cup and which were either pre-terminated or not renewed a year after.”

Ahmad continues, “In Q1, landlords tempered their expectations and therefore we saw adjustments in the average rent of available stock in many places in Qatar.”

According to hapondo, the decrease in rents is favourable news for tenants. Furthermore, similar to the office market, the retail sector beyond shopping centres offers a significant amount of equipped space available for businesses looking to minimise fit-out expenses. Despite the decline in shop rents, the retail sector in Qatar has seen notable progress in the past six months, particularly in malls. The unveiling of Velero Mall in Lusail late last year introduced new high-quality retail space to the market. In addition, Qatar Tourism launched the Shop Qatar campaign to spotlight the country as a retail destination. Positive indications of real estate demand are also evident, with Doha Festival City announcing its 500th lease and achieving full occupancy.

Overall, rents for shops outside malls in Qatar are back to normal after a short spike late last year. This is good news for tenants who can now find affordable spaces with less build-out costs. While mall rents haven’t dropped, the retail sector overall is doing well. New malls are opening, and existing ones are filling up. So, whether you’re a shopper or a business owner, Qatar’s retail landscape has something for everyone.