Qatar sees rise in property vacancies amid oil sector layoffs

Qatar’s prime residential property market saw an increase in vacancies in recent months amid layoffs in its energy sector brought on by lower oil prices,  real estate consultancy DTZ Qatar said in its third-quarter report.

Despite this trend, rents remained high during the quarter, supported by the Gulf country’s fast-growing population, which increased 9.2 percent year-on-year (YOY) to 2.37 million in May. The increase came on the back of steady job growth in non-oil industries, including finance, hotels, restaurants, trade and transport.

"With non-hydrocarbon sectors experiencing double-digit growth, occupancy levels are likely to recover over the next six months," said Johnny Archer, Associate Director, Consultancy and Research, DTZ.

Qatar’s retail market is said to be currently witnessing “strong demand from retailers and high occupancy levels,” while the report also highlighted “an increase in rental levels of lease renewals at busier shopping malls.” In addition, supply is expected to increase by 220 percent by 2019, as over 1.3 million additional square meters (sqm) of retail space in 12 new shopping malls is currently under development and may be delivered by that time.

Occupancy levels in the hospitality sector are expected to come under pressure due to the 4,000 new hotel rooms that are set to be added to the market from 2016. Hotel supply is forecast to rise in the medium term ahead of Qatar's FIFA World Cup 2022. A total of 11 new hotels were said to have opened this year, adding 1,400 rooms to the sector.

Activity within the commercial segment of the market was limited during the period, with most transactions accounting for units less than 250 sqm. Currently, the sector has 1.7 million sqm of office space the West Bay area, accounting for 40 percent of supply.