CEOs, real estate experts: Promising prospects for real estate sector in light of strong Qatari economy

Chief Executive Officers of several Qatari real estate companies and research experts affirmed the promising aspects for the real estate sector in the country in light of the strength of the Qatari economy, the wide scope of construction operations taking place in all regions, and the completion of many economic diversification plans within Qatar National Vision 2030, which makes it one of the fastest growing sectors, and the second after the energy sector.
In exclusive interviews with Qatar News Agency (QNA), the experts pointed out that these promising prospects for the sector are driven by the high domestic liquidity and huge spending in recent years on infrastructure and transportation projects, the rise in the state's gross domestic product (3.4 percent this year), and the increasing number of tourists, which will lead to a positive impact on the various indicators of the sector's performance in the coming years.
QNA's interviews with these figures in the market shed light on the performance of the real estate sector during the current period, and expectations regarding the return on real estate investment during the current year, in addition to the response of local banks to provide banking facilities to real estate companies, as well as whether there is a need for mergers in the market, such as those witnessed in the local banking market, to create major real estate entities that can compete locally and globally.
In this regard, CEO of Qatari Diar Abdullah bin Hamad Al Attiyah told QNA in an exclusive statement that the real estate market in Qatar witnessed a state of recovery with the hosting of the FIFA World Cup Qatar 2022, and this recovery was accompanied by an increase in rental prices and occupancy rates, indicating that the State of Qatar aims to attract 5.6 million visitors in 2023 - twice the number it received in 2016.
Qatar also aims to achieve occupancy rates of 70 percent in hotel establishment by increasing demand and diversifying tourism projects in the coming period, he added, noting that if this number is accomplished, the attractiveness of the Qatari real estate sector will increase in the medium and long term.
Al Attiyah explained that the features of recovery were reflected in the city of Lusail, which is one of the most significant real estate projects of Qatari Diar. People witnessed the opening of several new projects in the city, including Lusail Plaza Towers (Al-Sa'ad Plaza), Lusail Boulevard (Darb Lusail), Al-Saif Towers and Lusail Stadium, in addition to many new hotels and tourist facilities, he added.
He also noted that occupancy rates have reached 100 percent in some of these projects, which reflects the strong demand for modern and qualitative projects in Qatar that depend on quality and sustainability.
In regard to current real estate investment returns and expectation for the rest of the year 2023, Al Attiyah said that the real estate sector is considered one of the important sectors that are currently giving good returns to investors in the market and acquires a large share in economic activity, as investors in this vital sector seek to achieve permanent profits and returns with the least risks. Real estate investments achieve a rate of 7 percent to 9 percent, as a return on investment, according to the type of real estate investment, the location, and the age of the property, he added.
Al Attiyah indicated that 2023 is a challenging year for the real estate sector, due to the increase in bank interest globally, as the real estate sector relies mainly on bank financing, pointing out that this challenge is expected to be temporary for a maximum of two years until the current inflation is overcome, and this applies to the global real estate market and not only to Qatar.
Regarding opportunities for expansion and growth in the local real estate market, he said that the state took into account the concerns about the real estate scene after the 2022 World Cup - signing long-term contracts with real estate owners in order to preserve the stability of the real estate market after the World Cup. In addition to that, the state is making unremitting efforts to regulate and strengthen the real estate sector and support the continuity of recovery through legislative amendments that made it easier for foreign investors to reside and own freehold property in Qatar, he added.
He noted that the Investment Promotion Agency of Qatar (IPA Qatar) shed light on the real estate sector as one of the sectors expected to attract foreign direct investment during the post-World Cup period, in line with the long-term goals of urban development, economic diversification and increasing the attractiveness of Qatar as an economic center, explaining that this will certainly generate opportunities for expansion and growth in the real estate marker in the medium and long term.
In regard to the need for mergers in the real estate market in the country, such as those witnessed in the local banking market, to create major real estate entities that can compete locally and globally, Al Attiyah explained that the merging of real estate entities will enhance its regional position, as the merger will complement the diverse experiences, increase the efficiency of the nascent entity, and enhance its ability to compete in the local and foreign markets - acquiring larger shares in the real estate market.
For his part, United Development Company (UDC) President, CEO and Member of the Board Ibrahim Jassim Al Othman said, in an exclusive statement to QNA, that Qatar's real estate sector provides attractive investment opportunities in housing and retail trade compatible with all requirements and budgets, especially after the issuance of Law No. (16) of 2018 on the Regulation of Non-Qataris' Ownership and Usage of Real Estate, which contributed to the prosperity of the Qatari real estate market, attracting foreign investors, and granting them the advantages of Qatari residency in a safe and tax-free environment.
The success achieved by Qatar in hosting the World Cup left behind a huge national legacy that contributed to a significant increase in investment returns and enhanced the attractiveness of the Qatari real estate market. UDC's projects in the Pearl and Gewan islands achieved record demand in renting and buying real estate during the past year, exceeding 90 percent of the company's real estate, he said.
Al Othman expected that this increase in demand would continue with the approaching completion of the Crystal Residence buildings on Gewan Island, which presents a new concept in integrated residential projects, providing luxurious facilities and services for residents in a strategic location, and a fully air-conditioned commercial area and walkway on the waterfront. As for the Pearl Island, the Pearl International Hospital will present as a prominent medical edifice that enhances the comprehensiveness of the island and its services, maintaining its high attractiveness as a preferred destination for investment, he added.
The recent prosperity of the real estate sector has been reflected in the movement of sales and leasing in the Pearl and Gewan islands evident in the satisfactory financial results achieved by UDC in 2022, he said, indicating that the company recorded net profits of QR 390 million, an increase of 10 percent compared to 2021, and revenues of QR 1.8 billion. Meanwhile, the basic earnings per share amounted to QR 0.110, a 20 percent increase from 2021.
For his part, Head of Business Development Department at Qetaifan Projects Sheikh Nasser bin Abdulaziz Al-Thani said in an exclusive statement to QNA that the real estate sector has witnessed a steady demand for residential and commercial real estate, especially in luxury real estate, adding that, despite COVID-19, the real estate sector continues to grow and attract investors from all over the world.
The Qetaifan Island North is an integrated project that contains a water park (Meryal), a hotel, a beach club, a park, a mosque, a school, and a medical center, providing all of the investor's needs in one place. Additionally, The State of Qatar's infrastructure development projects and future events create great opportunities for real estate developers to take advantage of, he said.
He emphasized that the Qatari real estate market has consistently achieved great opportunities and attractive returns for investors, especially in the long term pointing out that the country's stable economy has also contributed to its emergence as a destination for real estate investment, and the financial results of Qetaifan Projects have benefited from these trends and contributed to the growth and development of the market.
Regarding the current real estate investment return and expectations for 2023, he explained that there are positive returns in the real estate sector, especially after hosting the 2022 World Cup, adding that they aspire to enhance the tourism and entertainment sectors through the Qetaifan Island North, which is the first luxury tourist and entertainment island. While return on investment is an important metric for evaluating our performance, their primary focus is to deliver a high-quality project that meets the needs of clients and investors, he added.
Regarding the opportunities for expansion and growth in the local real estate market, Head of Business Development Department at Qetaifan Projects said that there are still great opportunities in the Qatari real estate market, as the stable economy and the growing population contribute to the attractiveness of the real estate market. The growing demand for luxury residential and commercial properties also provides ample opportunities for real estate developers.
On whether there is a need for mergers leading to the creation of major real estate entities, he said that at Qetaifan Projects, we are constantly evaluating our business strategy and exploring opportunities to expand and develop our operations. While mergers may be an option in the future, our current focus is presenting the Qetaifan Island North with quality that meets the needs of our customers and contribute to the growth and development of the Qatari real estate market.
CEO of Msheireb Properties Ali Al Kuwari said in an exclusive statement to QNA that the real estate sector in Qatar is one of the most important sectors driving the economy and its growth. This sector has played a prominent role in the comprehensive development plans adopted by Qatar and has contributed to attracting companies, capital, and foreign investments significantly. With more urban projects and urban expansion, the sector continues to successfully play its role in providing great opportunities. Returns on investment in the real estate sector are a key element in continuing projects, as these returns constitute an important lever despite the global fluctuations, he added.
Through its smart and sustainable city, Msheireb Downtown Doha, he stated that Msheireb Properties presents a unique and new model for urban projects and urban transformations in record time since its launch. Currently, the occupancy rate in the city has increased significantly in various residential, commercial, and retail spaces, achieving more investment returns and reflecting the attractiveness of the Qatari real estate market to international companies.
Regarding the current real estate investment return and expectations for the rest of 2023, he explained that the returns achieved in 2022 were very good with the preparations for and during the FIFA World Cup Qatar 2022, as the occupancy rate in residential facilities reached 80 percent in 2022. Our 2023 expectations indicate an increase, especially in commercial spaces, thanks to the smart, sustainable, and modern facilities and services we provide to companies and entrepreneurs that meet the requirements of their business, in addition to the strategic location of Msheireb City.
Regarding opportunities for expansion and growth in the local real estate market, he said that Qatar has drawn up long-term plans, and therefore there are still opportunities for the real estate market to expand during the next phase to meet the needs of the market, especially in sustainable urban projects that contribute to supporting Qatar National Vision 2030.
The real estate market must adapt to the requirements of the next phase in terms of design, sustainability, and diversity, which we are beginning to see now, Al Kuwari said, noting that Qatar's advanced infrastructure and rapid transportation routes contribute to horizontal expansion and construction in new areas thanks to the ease of movement to the main business centers.
Concerning the need for mergers in the local market to create major real estate entities that can compete locally and globally, he said that the merger depends on the companies' decisions, ambitions, and vision. However, Qatari companies enjoy a good reputation in the real estate and construction market, in light of the achievements they have made to prepare for the World Cup. The competition of global giants has requirements and rules, and merger is one of the ways that help secure large capital and investment capabilities that can keep up with giant companies, and thus open many horizons for companies to access new markets.
In an exclusive statement to Qatar News Agency (QNA), Vice Chairperson of the Board of Directors and Managing Director of Ariane Real Estate Mohammed Al Ali said that the performance of the real estate sector in the country during 2021 and 2022 was growing, adding that they noticed an increase in the demands of the residential and commercial sectors.
Due to the high number of residents and the failure to meet the needs of the market, an increase in expected in this demand during the next few years, he pointed out, adding that Ariane Real Estate has achieved expansion and an increase in the volume of projects due to the strength and durability of the Qatari economy, which was an important factor in attracting many investors and companies to work within the State of Qatar. This has contributed to the growth of the Qatari real estate market, and as a result, Al Ali said that they are optimistic about the market's performance and growth for the coming period.
With regard to the current real estate investment return and its expectations for the rest of 2023, Al Ali explained that it currently ranges between 7 and 8 percent, and is expected to rise to 9 percent. An increase is expected to be seen in the value of real estate for the rest of the year, reaching between 10 and 15 percent, he added.
Regarding the opportunities for expansion and growth in the real estate market, he said that the local real estate market is an emerging market, and it has opportunities in all sectors, but the opportunities need investment in order to reap their benefits.
On the necessity of mergers in the market, he said that it provides an effective strategy to expand companies, create larger entities, increase financial flows, and improve final profitability, which leads to obtaining greater opportunities and offers to compete internationally.
The latest report of the Investment Promotion Agency of Qatar (IPA Qatar) goes in the same direction, as it note that the real estate sector provides profitable investment opportunities and favorable conditions for establishing business in the country. For example, 2022 witnessed the launch of 135 real estate projects that contributed to creating 1,856 new job opportunities and attracting investments to the state at a value of QR 86.29 billion.
The report said that the real estate price index recorded from the beginning of this year a growth of 2.6 percent during March 2022 compared to March 2021, which indicates the continued confidence of investors in the real estate market in Qatar. He also expected consumer spending to rise at a compound annual growth rate of 3.2 percent between 2021 and 2030, reflecting the growing purchasing power of local residents and international travelers.
The report also stated that housing spending is expected to increase at a compound annual growth rate of 2.6 percent between 2021 and 2030, in line with the expected increase in per capita GDP (compound annual growth rate of 2.4 percent) during the same period, and the increase in spending in areas related to quality of life.
It is likely that residential rents will witness an increase at a compound annual growth rate of 3.0 percent between 2021 and 2030, which indicates an increasing demand for high-quality residential products to meet the needs of the middle-to-high-income population.
It is noteworthy that IPA Qatar leads all investment initiatives in Qatar and contributes to the promotion of investment opportunities in the real estate sector, by issuing in-depth analytical reports and guidebooks on investment in Qatar, as well as hosting and participating in leading real estate exhibitions in the world, the latest of which is the International Real Estate Exhibition 2023 in France.