Qatar: Msheireb witnesses surging demand for office market in Q4
DOHA: Msheireb Downtown District (MDD) is experiencing a soaring demand for office space, with numerous companies expanding their presence during the fourth quarter of 2024.
According to a report released recently by Cushman and Wakefield, several office leasing transactions were confirmed in MDD during Q4.
Qatar Airways has confirmed that it will relocate its global headquarters to the Msheireb Downtown District (MDD). The supply of new office buildings has significantly slowed over the past two years; however, in Q4, the launch of NBK1—a high-spec office building with approximately 44,000 sq m of space in Msheireb, anchored by the Mercedes car showrooms—was a notable development.
On the other hand, Qatar's International Media Office announced its move to the project in December, while Qatar Airways revealed in November its plans to move its global headquarters to MDD, occupying approximately 35,000 sq m.
Recent lease agreements have reduced office space in Msheireb to less than 5 percent, with additional new tenants expected to be announced in Q1 2025.
Meanwhile, office occupancy in West Bay has also seen an positive growth momentum last year, largely due to new leases secured by the Civil Service and Government Development Bureau on behalf of various government entities. During the past year, over 150,000 sq m of gross leasable office space has been leased or reserved, primarily in Msheireb Downtown and West Bay.
The report indicates that available office space in West Bay now stands at approximately 160,000 sq m, accounting for less than 10 percent of the total supply, while in Lusail Marina District, the availability is around 75,000 sq m. In contrast, secondary and tertiary office locations are experiencing higher vacancy rates, with many buildings enduring long-term vacancies and limited demand.
Although there have been signs of upward pressure on prime office rents in recent months due to increased demand, rents remain competitive. CAT A office spaces are available for lease between QR100 and QR140 per sq m per month in West Bay and Lusail, while shell and core offices are available for less than QR100 per sq m per month.
The report further states that in secondary areas, office spaces can be leased for QR50 to QR60 per sq m per month, reflecting higher vacancies and lower demand.
For new developments to be justified, office rents will need to rise from current levels. In the meantime, as availability in prime locations decreases, landlords may be motivated to upgrade older buildings to meet the sustainability requirements of international corporate tenants.
© Dar Al Sharq Press, Printing and Distribution. All Rights Reserved. Provided by SyndiGate Media Inc. (Syndigate.info).
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