As of year end 2019, the total leasable office supply in Qatar is estimated to be approximately 5.0 million sqm, of which approximately 50 percent falls under the Grade-A category. Lower than expected levels of office supply was delivered during 2019 mainly due to delay in construction of various office developments in Lusail’s Marina and Fox Hills District. Additionally, approximately 1.0 million sqm of new office space is planned by the end of 2021, primarily in Marina District, Fox Hills and West Bay.
Continuing the trend in the initial two quarters of 2019 vacancy rates increased across all the major business districts of Qatar. Q3 and Q4 2019 witnessed a cumulative drop of 3.4 percent on the rental index compared to 2 percent during the initial two quarters of 2019. The increasing supply of commercial office space coupled with weak demand have resulted in rentals falling by about 30 percent since 2016. However, government initiatives to expand the private sector and introduce 100 percent foreign ownership could help mitigate this slowdown over the long run.
Turnkey developments, particularly smaller suites and serviced office space available in towers such as Commercial Bank Plaza, Doha Tower, etc. are witnessing slight upward trend in demand as they become more affordable and many businesses can be seen relocating in search of better deals.