Qatar Real Estate Report Q4 2012

The Qatar Real Estate report examines the Commercial Office, Retail, Industrial and Construction segments throughout the country in the context of a robust economy and a construction industry laden with optimistic supporting the expansion potential of the commercial real estate market.

With a focus on the principal cities of Doha, Al-Khor and Al-Wakra, the report covers the rental market performance in terms of rates and yields over the past 18 months and examines how best to maximise returns in the commercial real estate market, while minimising investment risk and exploring the impact of the government fed construction boom on a market which is moving its way up the regional ranks.

Qatars office and retail segments are growing fast and present bullish medium-term prospects, despite the fact that 2011 saw large falls in rental rates in these segments, particularly in Doha. Newly collected data from H112 however has revealed that the market has bounced back from these minor price corrections and that growth is once again on the cards.

The 2022 World Cup presents an obvious bonanza for the sector, 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 (primarily 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 an increase in demand and an improving construction pipeline.

Key Points

- BMIs Q412 report includes newly collected real estate data covering market performance for the first six months of 2012.

- Qatars short-term political risk profile remains among the most stable in the region. Despite enjoying little in the way of democratic freedom, Qataris benefit from massive hydrocarbon wealth which is spread generously across the countrys native population and enjoy the highest per capita GDP in the world. A small population - and one without much inclination to protest against the government – will keep the country insulated from large-scale public unrest in the immediate term.

- Qatar is likely to continue its efforts at enhancing its international investment position over the coming years. We are forecasting a current account surplus of 34.4% of GDP in 2012 and, in spite of our expectation of moderating global energy prices, forecast an average surplus of 27.0% of GDP in the period 2012-2015, facilitating further outflows of capital from the small Gulf state.

- We forecast real GDP growth to come in at 7.8% in 2012 and 7.3% in 2013, compared with our previous forecast of 7.9% and 6.9% for 2012 and 2013 respectively.

- As a result of larger-than-expected wage increases, coupled with our view that deflation in the housing market will ease, we forecast average inflation of 2.9% and 4.1% in 2012 and 2013 respectively, compared with an estimated 1.9% in 2011. That said, as oversupply in the housing market is set to moderate more slowly than we previously expected, we have lowered our forecasts for consumer price inflation, from 3.8% in 2012 and 4.3% in 2013 previously.

The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.