Market experts estimate that nearly 130,000 sq m of gross leasable office space has been leased or reserved in 2024 to date, with take-up mainly split between Msheireb Downtown Doha and the West Bay.
Doha, Qatar : Qatar’s office space is currently witnessing a surge in demand as occupancy rates mount up across core prime localities during the third quarter.
A report by Cushman and Wakefield signals that the market experiencing its highest level since 2015 in areas such as West Bay following a series of government or government-related lease agreements this year.
Market experts estimate that nearly 130,000 sq m of gross leasable office space has been leased or reserved in 2024 to date, with take-up mainly split between Msheireb Downtown Doha and the West Bay.
The report states that recent activity indicates that there is minimal availability in Msheireb Downtown, while the available office space in West Bay is expected to fall to around 160,000 sq m, which is less than 10 percent of the total supply.
Researchers stress that availability in Lusail’s Marina District for office spaces is anticipated to have nearly 130,000 sqm.
Although occupancy rates across key areas are rising, offices in secondary and tertiary office locations are observing higher vacancy rates, with numerous buildings suffering from “prolonged vacancy”.
The report highlights the gravitation toward prime locations and the lack of new demand from the private sector is growing the gap in rental rates and values between Grade A offices and buildings of lower quality.
“Office rents have reduced significantly throughout Doha over the past decade; however, with the increase in occupancy throughout 2024, we expect rents to increase in some prime buildings for the first time since 2015,” the report said.
It further emphasized that “Despite some signs of upward pressure on prime office rents in recent months, rents generally remain competitive throughout Doha, with CAT A space available to lease for between QR100 per sq m and QR140 per sq m per month in West Bay and Lusail, while shell and core offices are available to lease for less than QR100 per sq m per month.
On the other hand, office spaces in secondary areas leased as ‘shell and core’ can be secured for QR50 to QR60 per sq m per month, analysts said reflecting the high vacancy and lower demand.
However, international corporate occupiers are swiftly prioritizing sustainability and energy-efficient buildings, while few buildings outside of the main new office districts meet their requirements.
“As availability in prime locations reduces, we believe landlords may be incentivized to upgrade the older buildings to meet the requirements of these international corporate occupiers,” it added.
