Demand for Lusail Office Space Rises

Lusail Office Space sees increasing demand ahead of FIFA 2022 World Cup in Qatar.

Since commercial rents have gotten cheaper, many more businesses are looking for office space. Cushman and Wakefield just released a report for the second quarter (Q2) that says the total amount of purpose-built office space in Qatar has recently reached about 5.3 million square meters (sqm).

In preparation for the 2022 FIFA World Cup, which will be held in Qatar, more and more businesses are opening new locations all over the country. This is increasing the demand for office space. "As rents have become more affordable, demand for offices is increasingly for Grade A accommodation, most notably in Lusail.  The Al Dafna/West Bay district has the largest concentration of supply with approximately 1.8 million sqm of gross leasable area in more than 70 buildings," the consultancy firm said.

"QatarEnergy's new headquarters in West Bay has been opening on a phased basis throughout 2022. It comprises more than 200,000 sqm of office space and will house QatarEnergy and affiliated companies. The relocation of QatarEnergy from various locations throughout Doha to the new HQ in West Bay is likely to result in an increase in vacancy rates in secondary locations," it added.

After a long period of decline, the Real Estate Market Review for Q2 reported that office rents had stabilized again. Leasing activity in Qatar's office market has been slow in recent months, with most spaces less than 200 square meters in size seeing a lease. After dropping by more than half between 2015 and 2021, office rents have primarily leveled off, though the West Bay and Msheireb Downtown areas continue to command the highest rents on the market. Over the past three years, demand for "shell and core" office space has been deficient. This style of rental property is widespread in Doha, and many landlords offer free rent as an incentive to attract and retain tenants.

Prime West Bay rental rates per square meter range from QR100 to QR120, not including utilities. In some parts of central Doha, where vacant residential and commercial spaces are increasing, 'shell and core' office spaces can be rented for as little as QR60 per square meter per month. According to the report, office suites in Lusail can be rented for between QR75 and QR100 per square metre per month.