Qatar Real Estate Industry Update Quarter 2 2012

  • February 2014
  • -
  • Business Monitor International
  • -
  • 60 pages

Qatar has not seen as spectacular a real estate bubble as the UAE, its eastern neighbour. Consequently, it has not had to deal with the challenges of government bailouts and risks of bondholder losses. The Qatari real estate segment features both state-backed and private segment players, with the state-backed Qatari Diar essentially an arm of Qatari foreign investment strategy.
The 2022 World Cup presents an obvious bonanza for the segment, although it stands to reason that much growth will be organic Qatari demand, as flows of retail-minded tourists are more likely to be directed to the UAE (Dubai). Despite our in-country sources having limited information on vacancy rates, it is clear that the current effect of hosting the 2022 World Cup is a rise in demand. This, together with tougher lending conditions slowing development projects, should help take up some of the supply in the short term.
Our projections see a general rise in rental rates in 2012 across the real estate segment ’s three sub-sectors – retail, office and industrial – although the latter is limited by the shift away from rentals and towards direct development. As the Qatari economy looks to diversify away from its reliance on the hydrocarbons segment, real estate could be well placed to benefit from diversifying investments. UK investment manager Barclays Wealth has released a report showing the financial behaviour of 2,000 high net worth individuals from across the world, according to Al-Bawaba. Of the Qatari individuals surveyed, 100% had investments in real estate and 100% believed that it would be a safe segment for investment over the next 12 months. This was the highest rating for real estate investments among all the individuals surveyed.
Optimism in Qatar’s business community increased in Q411, according to a survey conducted by Dun & Bradstreet in conjunction with the Qatar Financial Centre Authority. The survey shows that business optimism for the non-hydrocarbon segment stands at 45 out of 100 for Q211, 18 points higher than in Q311 and at its highest level since Q109. Sentiment has been boosted by a strong economy and heavy government stimulus spending. However, the equivalent score for the hydrocarbon market fell from 22 to 20 on concerns about moderating global energy prices.
Qatar is improving organisation of its real estate segment and has announced that real estate agents operating in the country without a licence will now be subject to a QAR50,000 (US Dollar 13,700) fine, according to AMEinfo.
With a sky-high per capita income and a small native population, Qatar has not seen any unrest related to the 2011 Arab Spring across the Middle East and North Africa, and the risks of terrorism are considered low. However, the risk of conflict between the pro-US Gulf states and Iran remains a concern. Qatar hosts US military forces on its soil.

Table Of Contents

Executive Summary . 5
Industry SWOT Analysis .... 6
Qatar Real Estate/Construction SWOT . 6
Qatar Political Environment and Risk Analysis .. 7
Qatar Economic Environment and Risk Analysis 7
Qatar Business Environment SWOT 8
Real Estate Industry Overview .. 9
Market Analysis - Office .. 12
Rents And Yields ... 12
Data : Historic Rents, from 2010 to 2011 (QAR per m2/month) .... 12
Data : Net Yield, from 2011 to 2012 (%) ... 12
Data : Terms Of Rental Contract/Leases, Mid-2011 ... 13
Supply And Demand... 13

Market Projection Scenario .. 13
Data : Projection Rents (QAR per m2/month).. 13
Data : Projection Net Yield, from 2008 to 2016 (%) ... 13
Market Analysis - Retail .. 14
Rents And Yields ... 14
Data : Historic Rents, from 2010 to 2011 (QAR per m2/month) .... 14
Data : Net Yield, from 2011 to 2012 (%) ... 14
Data : Terms Of Rental Contract/Leases, Mid-2011 ... 15
Supply And Demand... 15

Market Projection Scenario .. 15
Data : Projection Rents (QAR per m2/month).. 15
Data : Projection Net Yield, from 2008 to 2016 (%) ... 15
Market Analysis - Industrial .. 16
Rents And Yields ... 16
Data : Historic Rents, from 2010 to 2011 (QAR per m2/month) .... 16
Data : Net Yield, from 2011 to 2012 (%) ... 16
Data : Terms Of Rental Contract/Leases, Mid-2011 ... 16
Supply And Demand... 17

Market Projection Scenario .. 17
Data : Projection Rents (QAR per m2/month).. 17
Data : Projection Net Yield, from 2008 to 2016 (%) ... 17
Construction Market Outlook .. 18
Construction And Infrastructure Projection Scenario .... 18
Data : Construction And Infrastructure Market Data, from 2007 to 2016 .. 20
Data : Construction And Infrastructure Market Data, from 2012 to 2021 .. 20

Macroeconomic Data .. 21
Data : Economic Activity 23

Environment Overview .... 24
Real Estate/Construction Business Environment Ratings . 24
Data : Middle East And Africa - Business Environment Ratings . 24
Qatar’s Business Environment .. 24
Data : BMI Business And Operation Risk Ratings .. 24
Institutions .. 25
Data : BMI Legal Framework Rating . 26
Infrastructure ... 27
Market Orientation .... 29
Data : Labour Force Quality .... 30
Data : Middle East and Africa - Annual FDI Inflows .... 31
Data : Trade And Investment Ratings . 33
Data : Top Export Destinations 34
Operational Risk ... 34

Competition Overview ... 35
Company Profiles ... 37
Barwa Real Estate 37
Qatari Diar Real Estate Investment .... 38
Ezdan Real Estate . 39
United Development Firms . 40
BMI Methodology ... 41
How We Generate Our Market Projections ... 41
Construction Market 42
Bank Lending ... 43
Real Estate/Construction Business Environment Rating ... 43
Data : Weighting Of Indicators 44
Sources .. 46

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