Qatar's retail GLA may exceed 2mn sq m by end-2020: ValuStrat
September 17 2020 08:59 PM
ValuStrat
ValuStrat

It’s a challenging time for the retail market in Qatar. Despite a reported increase in consumer spending, retail vendors have been experiencing falling turnover since 2017, the researcher says

The total gross leasable area (GLA) of organised retail space in Qatar grew 5% annually from 2018 to H1, 2020 up to 1.89mn sq m, with no addition during the first six months of 2020, a study has shown.

Approximately 170,000 sq m GLA of organised retail space comprising of three shopping centres: Doha Mall in Al Maamoura, 04 Mall in The Pearl and J Mall in Al Markhiya and Place Vendome in Lusail are projected to be completed by end-2020, research and consultancy firm ValuStrat has said in a report.

“Assuming no construction delays, the retail GLA will exceed 2mn sq m by the end of 2020,” ValuStrat said.

Unorganised retail comprises an estimated 70% of the total retail supply in Qatar with the addition of approximately 50,000 sq m during the first six months of 2020.

Nearly 60,000 sq m is in pipeline during the remaining quarters of 2020, it said.

Between March and May, there was the closure of all retail shops in shopping centres and commercial complexes except for pharmacies and shops that sold food (in view of Covid-19 lockdown).

In June, with the advent of phase 1 (unlock), ban on non-essential retail shops was partially lifted, ValuStrat said.

“It’s a challenging time for the retail market in Qatar. Despite a reported increase in consumer spending, retail vendors have been experiencing falling turnover since 2017. This can be attributed to a slowdown in the growth of household population and consumer spending and increasing competition from an influx of new retail supply,” ValuStrat said.

With the advent of the pandemic, this trend is predicted to exacerbate at least for 2020-21. As per ValuStrat research, the gap between demand and supply in the retail market in Qatar is estimated to exceed 1mn sq m GLA.

As of Q2 2020, the median monthly asking rent in shopping centres was estimated at QR230 per sq m, down 4% compared to Q2 2019; 2% dip in rents compared Q4, 2019 and no change compared to Q1, 2020, ValuStrat said.

Rent for street retail varied across municipalities, it said. Median monthly asking rents among street retail units in Doha stood at QR178 per sq m, down 9% compared to Q2, 2019; 2% compared to Q4, 2019 and 1% compared to Q1, 2020.

Median monthly asking rents among streets outside Doha stood at QR168 per sq m, down 7% compared to Q2, 2019, 2% compared Q4, 2019 and 1% compared to Q2, 2020.

The average rent for anchor stores within malls, or as standalone outlets countrywide, ranged QR50 to QR120 per sq m depending on size and location, ValuStrat said.

The retail leasing market amongst shopping centres was tenant-friendly, landlords offered lucrative incentives (such as waiving services charges or offer turnover rents as base rent, rent-free periods of up to six months with different contract periods) to retain existing retailers or attract new ones.

Typical incentives offered in the market for street retail were in the form of rent-free periods of up to three months with differing contract periods, utility inclusive contracts and fully fitted offerings, ValuStrat noted.




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