Property & Real Estate by sanjainoah

Property & Real Estate

Special Supplement Thursday, May 25, 2017

Qatar property market ‘firm and consistent’ amid low oil prices Qatar’s real estate sector “is still showing signs of firmness and consistency” amid the “repercussions and consequences” of the oil price drop, Market Watch report of industry experts found in their analysis for April 2017. The report said real estate transactions in various regions of the country in the past months indicate “a state of recovery that reflects the position of the real estate sector.” Also, the report said land trading and prices may improve despite an 80% drop in sales. “The real estate sector benefited from business acceleration and development projects led by the government in and out of Doha City, which created numerous investment opportunities for real estate companies, investors, and land owners, which were recently connected to new modern roads networks,” the report said. Citing data from the Ministry of Development Planning & Statistics, the report said the a total of 1,781 building permits were issued in the first quarter of the year, 491 for building villas, 330 for building youth loans housing, in addition to 52 licences for the construction of residential buildings.

In March, the ministry recorded the highest activity in terms of licences issued, which amounted to about 667 licences, followed by January (638), and February (476). The first quarter of 2017 witnessed licensing of 16 new government buildings, 54 commercial buildings, and 29 workshops and factories, and 25 mosques. “The real estate market flow will persist in the next three years without any effect on the course of the market; it will remain relative,” the report said. The report also commended the efforts undertaken to develop the tourism sector, which will enable the industry to contribute effectively to GDP development, with a 5.2% contribution “in the coming years.” “The indices of both the hotel sector and the hospitality sector are generally outstanding, and the target of making the tourism sector one of the pillars of economic diversification in Qatar will soon be reached. It will create more than 100,000 jobs and various levels of employees will be introduced,” the report said. (Info courtesy Gulf Times)

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Property & Real Estate

Special Supplement

Thursday, May 25, 2017

Investments indicate Qatari real estate market is appealing

“Investments confirm the existence of capital that believes the Qatari real estate market is appealing and a good choice,” industry leaders said in its latest report. It added that some liquidity “returned to the market,” especially in the stock exchange market, and that “seasonal liquidity is looking for other investment channels.” The report also lauded government efforts that led to current real estate transaction values and improved demand for empty land, as well as protection from “foreign factors.” This, it added, also contributed to the diversification of the real estate sector, real estate initiatives launched by the private sector, growing interest in the tourism and hospitality sector, and other projects that are parallel with the commitment to spend on major government and development projects. External factors continue to test the real estate sector, “affecting its domestic course” despite efforts to shield it from repercussions wrought by global recession and sharp decline in oil prices, the report continued. According to its Market Watch Office, which prepares a monthly real estate report, the

property market “is still waiting to see if the cutting down of oil production agreement will improve prices.” “Because this agreement is expected to fail, some countries including major oil producing countries are concerned that the growth in the production of ‘US rock oil’ will start a price war by the end of June,” the report said. The report said real estate transactions in the last few weeks indicated “fears” among investors and real estate developers, who were wary of fluctuating oil prices. “Any future projections of the market must not be isolated from this category of investors, real estate developers must carefully examine the market, adjust to cope with the current conditions, and develop plans and strategies to play a positive role in enhancing the real estate market,” the report said. The Market Watch Office also noted field and analytical monitoring of local market indicators revealed that market conditions “are within normal standards.” (Info courtesy Gulf Times)

Qatar growth to strengthen this year Driven by a stronger non-hydrocarbon sector growth due to higher oil prices, an increase in capital spending and fading drag from manufacturing, Qatar’s growth is expected to pick up this year, QNB has said in a report.

were the other key sectors supporting growth. Underpinning and driving growth in these sectors was robust population growth of 7.3% in 2016.

The country’s real GDP growth was 1.7% in Q4 and 2.2% for 2016 as a whole, moderating from an annual growth of 3.6% in 2015, figures released recently by the Ministry of Development Planning and Statistics (MDPS) show.

These gains more than offset a contraction of 1% in manufacturing, the largest segment of Qatar’s non-hydrocarbon economy accounting for 20.0% of the sector. However, this decline is attributable entirely to lower output in Q2, 2016 and appears to be a one-time occurrence.

The hydrocarbon sector contracted by 1% in 2016, QNB said in an economic commentary and noted this was due to declines in both crude oil and natural gas production.

“We expect growth to pick up in 2017, led by the nonhydrocarbon sector. Supporting higher growth will be three key factors,” QNB said.

Crude oil production, which accounts for around 15% of the hydrocarbon sector, fell by 0.7% in the year owing to maturing oil fields.

First, QNB expects oil prices to pick up and average between $55/b and $60/b in 2017, an increase of over 20% from the average level of $45/b in 2016. In addition to boosting government revenues, higher oil prices will improve consumer and business sentiment, leading to faster job creation, more spending on durable and non-durable consumer goods and higher investment.

Natural gas and related liquids production—the remaining 85% of the hydrocarbon sector, declined likely as a result of maintenance carried out on some of Qatar’s liquefied natural gas trains during the year. Growth in the non-hydrocarbon sector was 5.6% in 2016. Construction was the largest contributor to growth, adding 2.3 percentage points (pps). Following construction, services such as finance (1pps), government (0.8pps) and real estate (0.6 pps)

“Indeed, we have seen signs of that with the recovery in the fourth quarter of 2016, which bodes well for 2017,” QNB said. Second, the government announced in its latest budget plans to raise capital spending by 3.2% in 2017. This was also accompanied by a commitment to increase the allocation to

capital spending over the next three years, providing support to future growth. The increased allocations of capital spending will be on projects related to the upcoming world cup, transportation, infrastructure, education and health. The government’s commitment is buttressed by its strong balance sheet. Third, the drag from the manufacturing sector should fade in 2017. Manufacturing subtracted 0.2pps in 2016 compared to adding an average of 0.6pps to non-hydrocarbon growth over 2014-15. The sector has already begun to recover, posting positive growth in Q4, 2016. A rebound in the sector will also be aided by the opening of a new refinery in Ras Laffan which began production in December 2016. Despite low oil prices, the Qatari economy has continued to be resilient in the face of low oil prices. Qatar has enjoyed the strongest non-hydrocarbon GDP growth in the region throughout the oil price decline. “Looking ahead, we expect growth to strengthen in 2017 and higher capital spending to support growth over the mediumterm,” QNB said. (Info courtesy Gulf Times)

Property & Real Estate

Special Supplement

Thursday, May 25, 2017

Building Vibrant Communities The main advantages at Al Jazi

Sheikh Jassim Bin Faisal Al Thani Board Member

The major milestones in the company’s development Established in 1995 as a subsidiary of Al Faisal Holding, Al Jazi Real Estate has become one of the leading real estate development companies in Qatar, developing and managing a wide variety of high-end residential and commercial properties. One of Al Jazi’s first projects was the exceptional Al Jazi Gardens which comprises over 500 villas and is considered one of the most prestigious addresses in Qatar. In 2000, driven by Qatar’s development and population increase, the country witnessed a real estate boom and Al Jazi Real Estate became a key player in defining the new West Bay skyline, as well as other areas of Doha such as Al Sadd and Gharrafa. Having built over 14 properties, comprising residential and commercial towers and compounds of exceptional quality and architecture, Al Jazi continues to develop more residential and commercial properties in Qatar.

Al Jazi Real Estate properties feature a number of qualities which differentiate them from other players in the market. First, location—all Al Jazi properties are centrally located in close proximity to major shopping malls, offices, recreational parks, restaurants, schools and nurseries, and many of Doha’s main attractions. Second, whether in the West Bay district or in Central Doha, Al Jazi properties are consistently built to a high quality standard, they are well-maintained, have great architecture and beautiful landscaping, and are safe with high levels of security. Furthermore, all Al Jazi properties are part of vibrant communities, giving tenants the sense of belonging and the comfort of home. Moreover, our residential and commercial properties have innovative and modern solutions to satisfy the market demand in terms of design and fittings, with energy-efficient, cost-effective solutions.

As an industry expert, what is your evaluation of the current market scenario? I believe it’s safe to say that the real estate market is currently in a stable state. It is one of the key economic indicators here in Qatar and in the GCC in general, although it is currently growing at a slower rate than usual. Specifically in Qatar, the country is preparing to host one of the biggest events in the world, the FIFA 2022 World Cup, which is likely to result in a boost in the tourism, retail, and real estate sectors. This and an increase in population will mean more residential units, hospitality properties, retail units, more jobs and more commercial units. The urban development of

Qatar has also led to an increase in demand in housing and retail development in new areas, as the country expands beyond Doha. Once rail infrastructure work is completed, the demand for housing and retail will increase further in those new areas, so requiring more real estate. In line with the 2030 Vision of Qatar, the country is heavily investing in the real estate market and other sectors and I hope, God willing, that this will mean more projects for us as Al Jazi Real Estate Company, and more growth for Qatar.

Being a veteran, what are your future prospects, short and long term? In line with Qatar’s growth and development, and its increasing population, naturally the demand for housing and work will rise. With all the infrastructure development that is taking place and nearing completion, the country will witness development through new, more sophisticated investment, more innovation, and more growth. This, together with the major events the country is hosting in the future and the 2030 Vision of Qatar, leads us to be very optimistic for a positive future with more projects and growth.

Qatar realty sustains measured recovery Syed Ameen Kader

After going through a difficult period last year that saw residential and office rents falling at least in the prime segment, Qatar kick-started 2017 with increased volume in real estate transactions, signalling a recovery, albeit at a measured pace, of the property market. The growth in demand though could be outpaced by planned deliveries later this year, which could pressure sale and rental rates in the short term. “In the first month of the year, the total real estate transactions estimated were worth 2.5 billion Qatari riyals, which is around 25 per cent more than the same period in the previous year,” says Anurag Gupta, director and head of real estate advisory at KPMG Qatar. He attributes this growth to strengthening oil prices and government efforts to control expenditure, which helped improve market sentiment. DTZ Qatar, which tracks the Qatari property market, states that following strong growth in the real estate market between 2011 and 2015, there were signs the real estate market, along with the rest of the economy, was feeling the impact of low oil prices last year. “A reduction in demand for office space and prime residential accommodation in particular, coupled with continuing output on the supply side, saw rents fall,” says Johnny Archer, associate director

or research and consulting at DTZ Qatar. Quoting rents for vacant residential units reduced by 5-12 per cent, whereas quoting rents for prime office in West Bay saw reductions of between 10 per cent and 20 per cent, he says. This trend was also reflected in the Real Estate Price Index issued by Qatar National Bank, which hit a yearly-low at 266.71 points in September, but managed to maintain its growth trajectory until January at 282.65 points. However, February and March saw the price index falling to around 277 points. “Currently residential rents are under stress and are facing the heat on the premise of the downsizing of staff in both the private and public sectors,” says Gupta. However, he adds that most investors and developers feel that these trends are temporary, and that demand, as well as prices, will rebound by yearend. Qatar also has a number of new projects in the pipeline that are expected to boost demand.

Retail Retail supply in Doha has significantly increased in recent years, with the most recent major completion of the Mall of Qatar adding 256,000m² of gross

leasable area. Given that the development pipeline for retail in Doha represents more than double existing stock over the next five years, Cooper expects the market to become more competitive.

adding that the organised retail segment still maintains good occupancy rates and stable monthly rentals ranging from 270-310 riyals per square metre as of the first quarter.

“This has translated into a slight softening in average rents over the last 12 months of between three per cent and five per cent,” he adds.

The real estate supply pipeline is substantial in most sectors, perhaps most notably in hospitality and retail. Archer cautions that this calls for a careful consideration of the demands created by the projected demographic trends.

However, with the significant uptake during the last quarter of 2016, Gupta says Qatar’s retail sector seems to have got a fresh lease of life. “Going forward, we believe that any additional supply on the retail front in the short term may have an impact on the supply-demand dynamics of the retail market in Qatar, directly impacting rents, which are more or less stable at the moment with consequent demand in the market,” says Gupta,

“We would anticipate an increase in demand for good-quality housing, targeting lower to middleincome residents,” says Archer. “It is likely that the Manateq Economic Zones will provide an opportunity to develop modern business parks and logistics facilities, which will help enable the diversification of the economy away from the hydrocarbon sector.”

Special Supplement

Property & Real Estate

Thursday, May 25, 2017

Comfort & Culture Can you give us a brief account of Majestic Real Estate Co. and its position in the Real Estate market in Qatar?

Waleed Al Hashesh Chairman

Interview with Waleed Al Hashesh, Chairman, Majestic Real Estate and Paroon Group:

Majestic Real Estate company was established in 2008 in the Pearl, Qatar as real estate development and exclusive marketer in many fields which include selling, free-hold, investment and leasing for residential towers with hotels services. The company also tries to attract local and international investments to Qatar, where many investment opportunities and resources are available such as Lusail New City, the Pearl, Al Shamal and South; administrative, residential and hotel projects. The establishment of several commercial shopping malls in the current period is also to be noted.

Who constitute the main clientele of Majestic Real Estate? Investment in the Pearl is distinguished by its special nature, climate, location and various designs and wide range of cultures, as well as comfort. These advantages will commensurate with the level of customers seeking elegance and luxury housing, as well as good investment and security.

What is the company’s approach in Property Management? Majestic Real Estate deals with the owner directly, whether it be exclusive marketing, properties management or as regards property valuation.

Which is the focal area of the company? The Company’s current policy is to market and manage investment inside Qatar.

What are special services that the company offers its customers? Some of the most prominent services and offers to Majestic Real Estate customers in management services include: • Provide full clarifications for customers from all nationalities regarding the investment in the Pearl especially and Doha in general. • Resale services with good benefits. • Banking facilities and immediate handover on paying only 30% and the remaining amount in 20 years’ time. • Release without charges or commission. • Residential tower with hotel services.

As a Qatari company, how do you see the rate of competition from foreign companies in Qatar? Competition is a necessary factor in all fields as it compels different companies to offer their best in services regarding price, service standards, and timely completion, among others.

With a specialized wing for real estate valuation, how do you see the real estate sector in Qatar? Real Estate is a global field which can suffer from ailments but will never die. The current real estate market is stable. I am optimistic with the real estate market in Qatar in the forthcoming period as Qatar seeks to improve its infrastructure and roads, major projects and international hotels as well as residential towers. The Majestic Tower 3 and Porta Arabia in the Pearl received a good response from customers after the official opening; numerous queries regarding the investment opportunity in the tower 3 were received from individuals and companies. A wide range of units have already been booked by direct ownership or by bank financing.