Doha, Qatar: Retail market spending has been projected to increase to more than QR57bn in 2023, backed by a surging number of tourists, economic growth, and an augmenting number of world-renowned international retail outlets in Qatar.
According to research conducted by Cushman & Wakefield, there is over 1.7 million sq m of leasable floor space in the country’s main organised retail malls (excluding supermarket buildings with ancillary units).
The analysts also state that there is over 400,000 sq m of leasable space in ‘outdoor’ retail/F&B destinations, in areas such as The Pearl, Souq Waqif, Souq Al Wakra, Msheireb Downtown, Katara, Doha Port, and Lusail Boulevard.
However, the country’s retail real estate market has experienced a notable growth in supply during the past eight years.
The report indicated that the rents have been falling in most retail industries due to competition within the market to attract retailers as this has led to an enhanced retail offering to shoppers.
It said: “This supply was boosted earlier this year by West Walk, a mixed-use development of restaurants and retail outlets in Al Waab. Several retail developments continue to attract healthy footfall and benefit from high occupancy rates; however, many older malls or recently opened projects still struggle to attract footfall, which is impacting rental levels and occupancy.”
Researchers at Cushman and Wakefield said “We estimate that overall occupancy rate across Qatar’s retail malls has fallen to approximately 80 percent. Rent-free incentives, fit-out contributions, and turnover rent arrangements are all on offer from most developments to entice retailers; however, demand for retail space has fallen in 2023 with many retailers looking to consolidate after expanding their operations in Doha over recent years.”
As per Oxford Economics, the total nominal retail sales in Qatar last year was close to QR53.6bn.
This was the highest recorded rate since the last five years and the sales had been impacted by COVID-19 in the intervening period.
“Qatar’s disposable income levels are also among the world’s highest, reflecting $97,096 in December 2022, when adjusted by purchasing power parity."
"Headline rents for line units in Doha’s prime malls remain between QR200 and QR250 per sq m per month, exclusive of service charges.”
Line unit rents in various secondary malls are constantly less than QR200 per sq m per month.
Anchor units and entertainment provisions in malls typically benefit from lower rents of between QR60 and QR150 per sq m per month, the report outlined.
On the other hand, retail showrooms are typically available to lease for between QR80 and QR150 per sq m per month.
“Small convenience retail outlets in secondary locations such as strip malls are increasingly leased based on a sustainable rent of between QR5,000 and QR10,000 per month, depending on the unit size,” it added.
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