West Bay - Dafna Market Beats March - 2018
Overview West Bay is the most affluent areas also known as the prime commercial business hub of Doha in the state of Qatar. Majority of the city s corporate activities are concentrated in West Bay. The skyline consists of the most moderns skyscrapers built in the state of Qatar. West Bay is the destination to the swanky lifestyles. The real estate market is largely driven by the diversified asset classes on offer in the commercial, residential, hospitality, and theretail segments. A larger proportionate of the commercial towers are entirely occupied by the government ministries, public head agencies, and hydrocarbon projects. Residential towers offer different sizes of upmarket apartments for mass affluent households. Also majority of the hospitality and tourism projects are confined to West Bay which makes it the talk of the town.
Residential The residential market in West Bay consists of largely high-rise towers and villa compounds. Being one of the affluent location in the country, West bay plays a pivotal role in real estate economy. As per our research, the average monthly rentals for the different configurations of apartments along with their yields can be understood from the illustration. Currently, certain owners are offering perks and bounties in terms of free one month rental period on the annual contract to attract new tenants. Mostly, the apartments are leased out either in fully or semi furnished order as per the preference of the tenants. The general fondness of the tenants are to lease apartments in towers which are well maintained as they do not want to feel the pinch for paying additionally to take care of the maintenance of the premises. 8.3 6.0 5.0 3.1 14,750 17,250 10,500 13,100 1 BR 2 BR 3 BR Duplex Monthly Rental (QAR) Vs Yield (%) The overall occupancy in the residential market is around 76% in West Bay. The highest occupancy witnessed was in 1 Bedroom configurations followed by duplex and 2 bedroom configurations respectively. The average built up area of 1 BR was found to be around 85 sq.m, 2 BR & 3 BR in the location have an average built up area of 145 sq.m and 200 sq.m respectively. Based on our research, over 325 units of different configurations are currently available for leasing. At prevailing monthly rental rates, the cumulative rental income from the unleased is estimated at QAR 4.5 Million. The 3 Bedroom category holds the majority share i.e. 60% of the value. 1 BR 2 BR 3 BR Duplex Occupancy QAR 0.17 QAR 1.53 QAR 2.74 QAR 0.12 1 BR 2 BR 3 BR Duplex Value of Leasable Stock (In Mn)
Commercial West Bay being the prime location for commercial activities serves as the central business hub. The highlight commercial activity in West Bay include the opening of Al Asmakh Tower on Majlish Al Tawoon Street. The additional commercial supply in pipeline within West Bay further adds on to subdued demand. The longing for small office suits is doing rounds where the clients look out for comparatively smaller fit out for which, the owners are ready to lease out a quarter or half the floor. As per our research the commanding monthly rentals for some offices were as high as QAR 200 per sq. m to QAR 250 per sq. m while majority of the transaction observed were between monthly rentals QAR 130 to QAR 180 per sq. m irrespective of office stature. 250 130 Lease Rental Scale QAR/sq. m Current inventory of around 300,000 sq.m of office leasable area is available within West Bay. The average occupancy remains at 50 55% for Grade A offices while in Grade B offices, the average occupancy is close to 65%. By year 2020, over 535,000 sq.m of office leasable area that is 1.78 times for current inventory would be added by the under construction commercial towers. Occupancy 53% West Bay has started witnessing challenges from the other secondary business hubs in terms of supply of newly built high graded moderate size offices, rentals, and occupancies. The immediate prime focus on Lusail Marina district and Msheireb Downtown project with attractive offers on rentals probed affordability in West Bay as well. ~ 0.53 MN Under construction Inventory
Hospitality Majorly, luxury hotels such as 5 star, 4 star, and serviced apartments are concentrated in West Bay which, includes Diplomatic street, Majlis Al Taawon street and Al Corniche street. As per Qatar tourism authority reports, the number of visitors entering the country reduced which, indirectly had hampered the hotel performance during second half of 2017. The government has, as a counter measure introduced much relaxed and enhanced policies for visa free entry to 80 countries in order to attract citizens from across the globe to explore new business ventures in Qatar. West Bay alone constitutes to approximately 50% of the entire hotel supply in the country. 5,896 4,211 1,356 Considering the mega event FIFA 2022, surplus of 6,500 keys are estimated to add up to the hotel inventory across the country. Out of which approximately 1,500 keys would be adjusted in West Bay spanning across Grand Murwab City Center Hotel, Traders Hotel, Double Tree Hilton and Qatar Petroleum District. 5 Star 4 Star Service Apartment Key Distribution (Units) ADR 560 5 Star 56% As per Qatar tourism authority, the occupancy across the hotels in Doha in January 2018 was 58 % however the occupancy was 56%, with average daily rent (ADR) of QAR 560 and RevPAR is QAR 314 respectively in the 5 star category hotel. QTA to set up national tourism strategy to boost up the occupancy rates up to 72% across all hotels by 2023. 314 152 RevPAR 59% 65% 54% 125 256 192 256 4 Star 3 Star Budget 82 ADR (QAR), RevPAR (QAR) $ Occupancy (%)
Retail West Bay is the prime retail location and a favorite destination for upmarket shopping and hangouts. The designated malls in West Bay suffices to specific needs in the location. City Center Mall being one of the oldest malls commands premium for its accessibility, various approach points and landmark status. The Gate Mall is one of a kind and known for it s ultra luxury and world class brands which caters premium customers. Also its immediate vicinity to commercial towers adds on to the accessibility quotient of the mall. The Lagoona Mall which is second to none remains the only choice retail space in the neighborhood. The prominent residential and commercial establishments in the vicinity leads to maximum foot falls for the Mall. Average Monthly Rental QAR/sq. m ~ 0.2 Mn Currently around 200,000 square meter of net leasable retail inventory is available in West Bay. The overall occupancy remains at around 85%. City Center alone contributes to 60% of the net leasable inventory (NLA) followed by Lagoona Mall and The Gate Mall. The average monthly rentals are in the range QAR 260 to QAR 300 per sq. m. With new retail supply being functional in close proximity to West Bay, it becomes extremely challenging for the landlords to sustain with the current tenants at prevailing rental rates. Hence incentives and perks are provided by landlords to retain the existing clients and attract the new ones. Lagoona Mall (28%) Retail Supply City Center Mall (60%) NLA Distribution (%) By Mall
Contact Fadi Barakeh General Manager E : gm@alasmakhrealestate.com Gaurav Borikar, MRICS Director - Valuations and Research E : gaurav.borikar@alasmakhrealestate.com Hisham Qureshi Research Manager Principal Author E : hisham.qureshi@alasmakhrealestate.com Real estate research department offers, Highest Best Use Analysis Feasibility Studies Catchment Area Analysis Competitive Analysis Rent Analysis Project Data Management Customized Market Reports Quarterly Real Estate Research Report You may download our report from www.alasmakhrealestate.com For complimentary subscription, please contact us on: Email: advisory@alasmakhrealestate.com Tel: +974 4448 5111 Address: AL Asmakh Tower, West Bay, P.O.Box 15068, Doha, Qatar Executive Disclaimer : This report has been prepared by Al Asmakh Real Estate Development for general information only. No research source is guaranteed to be accurate in the report. Al Asmakh Real Estate Development shall not in any even what so ever, be liable or responsible for the any indirect, incidental, special or consequential losses or for any economic loss including loss of profit, revenue, goodwill or anticipated savings of the bank or other persons, however caused and whether arising in contract, (Including active, passive or imputed negligence) or whatsoever.