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Doha, Qatar: Qatar’s retail real estate sector remained steady during the first three months of the year, providing an increase in supply, according to commercial realty agency - Cushman and Wakefield’s report.
This static growth comes as a result of ongoing expansions in the market across Qatar. Lulu Group International, one of the key players in the region, opened several stores in Q1 2024.
The report outlined that numerous units are “being fitted out”.
At the same time, it is anticipated that outlets including Doha Mall will open their doors to the public in 2024, adding close to 100,000 sq m of retail floor space to the market, which is expected to represent the largest mall in South-West Doha.
It said: “The opening of Doha Mall will see Qatar’s supply of organised retail malls increases to more than 1.7 million sqm of leasable floor space.
This supply analysis excludes supermarket buildings with ancillary units.”
However, this supply is augmented by over 400,000 sq m of leasable space in ‘open-air’ retail/F&B localities such as The Pearl Qatar, Souq Waqif, Al Wakra, Msheireb Downtown, Katara, Doha Port, and Lusail Boulevard.
A few of Qatar’s biggest malls have stated improved footfall and sales performance over the past few months, due largely to the surge in visitors from Saudi Arabia, and other countries during the AFC Asian Cup tournament held early this year.
Amidst soaring occupancy rates among Qatar’s state-of-the-art malls, the overall increase in supply over the last five years has led to a struggle in attracting footfall, with vacancy rates growing, indicated Cushman and Wakefield.
However, analysts say that around 20 percent of retail units within organised malls are currently vacant.
Many of these vacant spaces can be found in secondary malls, or at the upper floor levels of busier malls.
Meanwhile, the demand for prime retail units and F&B opportunities is positioned firm with tenants exploring opportunities of six months to undertake internal fit-outs.
The increasing supply of new retail space has impacted retail rents in recent years, although rents in busier malls have stabilised and are showing signs of recovery.
The average rental rates for standard line units of nearly 120 to 250 sq m in Doha’s prime malls vary between QR220 and QR280 per sq m per month, with small retail stores across the country ranging between QR300 and QR400 per sq m per month. As a two-tiered market emerges, some malls that have seen footfall reduce, often achieve less than QR200 per sq m per month for line units.
Apart from these organised retail malls, many Qatar-based outlets lease between QR80 and QR150 per sq m per month. Restaurants and cafés in some of the country’s most favored outdoor areas typically develop rental incomes from QR130 to QR180 per sq m on a monthly basis.
The report concludes that small outlets in secondary places in Qatar have witnessed an increase due to a “sustainable rent” that varies from QR5,000 to QR10,000 per month, depending on the given unit size.
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