Qatar is expected to have 293,000 residential units, 51mn sqft of office supply and nearly 31,000 hotel rooms and apartments by 2018-end, assuming all projects are delivered on time, advisory firm ValuStrat has said in a report.
By the end of the year, Qatar’s population is expected to reach 2.69mn, it added.
Supply projections have been adjusted upwards to 8,800 units in the residential sector due to delayed deliveries. Rent and price corrections are expected to continue especially in prime areas in the first half of the year due to increasing number of project handovers, expected to stabilise by the end of the year.
In the office sector, ValuStrat said the majority of the supply is expected to concentrate in Lusail which will continue to depress commercial rents in the area unless there is an uptick in demand or a large number of users in secondary locations move to occupy offices there.
The government relaxed visa rules for many countries in the second half of 2017 and is targeting to diversify the source of inbound tourists this year.
As of October 2017, Qatar had 25,600 hotel rooms and apartments. A total of 1.94mn international guests (compared to 2.38mn last year) stayed an average 3.7 nights and spent an average daily rate on their room of QR417, ValuStrat noted.
“The fall in occupancy was caused by the loss of visitors from GCC triggered by regional sanctions imposed on Qatar since Q2 2017. Performance-wise, the first ten months saw occupancy rates averaging 60%, which is 3% lower than last year, however, the RevPAR (revenue per available room) declined by 14%.
“Regional challenges had a direct negative impact on hospitality sector and to some extent on retail sector as footfall from tourists decreased. However in the industrial sector it had two positive spillovers,” ValuStart noted.
Firstly, the demand for local produce increased, which resulted in local manufacturers increasing their production capacity. It has also provided opportunities for further optimisation in food security. The government of Qatar introduced multiple initiatives to support the private sector to capitalise on these opportunities. Secondly, due to the suspension of land borders, the demand for port and logistical services augmented to support buffer stocks. Hamad Port saw 30% YoY average increase in cargo since Q2, 2017, the report said.
Additionally, government-regulated warehousing zones were completed in south and north of Doha, which offered storage options at competitive rates.
As a result, rental rates in relatively older industrial areas saw marginal declines during the first half of the year, stabilising towards the fourth quarter, ValuStart said.