With all eyes on the upcoming period, KPMG experts have identified the big trends in Qatar’s real estate market in 2021.
With the regional ties coming back to normal, affirmation of the COVID-19 vaccine and winning the bid to host Asian Games in 2030, the market sentiments are reaching a new high.
1. Evolution of the workplace
The year 2020 was all about remote working. Work from Home (WFH) concept has changed the way business is done today. While many corporates can be seen adopting and getting comfortable with this concept, we believe the dynamic/hybrid workplace model will become a new normal even post pandemic. With greater emphasis on flexibility and safety, the office of the future will promote health benefits to the employees and provide opportunity for new ways of collaborating and building relationships.
Globally, the concept of Co-working spaces is growing and many companies are focusing on curtailing their real estate requirements by incorporating the flexible approach. In Qatar, Co-working spaces providers such as Servcorp, Regus, and Workinton are reimagining the workspace of the future by providing employers with flexibility in terms of space and geography. “These companies are promoting “less-densified” office spaces with “professional distancing” that are strategically located to help employees get back to work safely and quickly. In our opinion, professional services firms, start-ups, small businesses, e-commerce and tech-companies will be huge beneficiaries of this new normal,” said Anurag Gupta, KPMG Director, Strategy and Real Estate Advisory.
2. Uptick in real estate demand
The lifting of blockade, positive regulatory changes, possibility of organized real estate concepts such as REITs, Qatar is set to witness higher influx of invested people. With more opportunities in the market and increased inflow of white-collared workforce, there can be a positive upturn in the demand for residential housing over the next short to middle term, providing a much-needed fillip to the sector.
Qatar is also experiencing increased real estate transactions. During the last six months, the value of real estate deals exceeded QAR15billion, which is quite encouraging. The advent of new real estate products in the form of integrated townships along with a host of entertainment offerings. Projects such as The Qetaifan Island and Lusail Seef are attracting considerable interest from buyers as well as investors. Moreover, with Qatar opening its property market to foreigners and rewarding buyers with permanent residency, Qatar residential market will witness a movement from a rental based real estate to a capital (sales) based economy.
3. Greater demand for warehousing and data centers
Qatar is witnessing greater demand for warehousing facilities originating primarily from the manufacturing and logistics sector. Qatar Free Zones Authority can be seen attracting significant investments from around the globe in setting up businesses in Qatar. For instance, France’s Gaussin Advance Mobility Company along with Al Attiya Motors established the first assembly plant of electric vehicles at Ras Bu Fontas Free Zone. GWC opened their latest logistics hub spanning across 6,000 sqm at Ras Bu Fontas Free Zone.
In addition, Qatar’s digital transformation agenda has paved the way for e-commerce and Tech-companies to foray into the Qatari market. The Qatari government gave Microsoft permission to build a public cloud data center in the country. With this news, Google too follow the suit by announcing a Google Cloud facility for Doha. Qatari business Meeza is also building its fourth data center in Doha, expected to be completed by mid-2021.
4. Increased role of technology
Disruptive technologies have propelled the use of specialized solutions in real estate and property management industry. The scope of PropTech has expanded significantly to include information transparency, AI-powered valuations, virtual viewings, online listings and block-chain transactions, among others. Many public sector agencies in the region can be seen embracing PropTech in expediting their daily functions. For instance, the Dubai Land Department (DLD) introduced Artificial Intelligence into the real estate valuation process. This has helped reduce the valuation processing time to 15 seconds and curtail the cost by almost 20 percent.
“Though the PropTech industry Qatar is still developing, we believe the use of technology in real estate is only going to accelerate in 2021. From developers to brokers, the industry is now transforming digitally – from remote viewings, digital contracts, and rental platforms, the wave of digital transformation is spreading across the sector and soon will be seen embracing these technologies and demonstrating prudence and future readiness,” added Siddhant Vernekar, Associate Consultant - KPMG Real Estate Market Research.
The Road Ahead
“While we have looked into the likely changes in the real estate landscape and identified the key trends for the year ahead, we believe, Qatar is still in the process of identifying a strategy that will have a profound and lasting implications on real estate investment and development. However, Qatar must continue to enhance its strong economic fundamentals that will help sustain growth over the long term. With confidence returning to the market and the industry undergoing a series of fundamental shifts, it is likely that the political stability and unity in the region will remain Qatar's biggest growth driver, and Qatar real estate will emerge a key beneficiary,” concluded Anurag Gupta, KPMG Director, Strategy and Real Estate Advisory.