Commercial rents continue to remain high in the country, realty experts and businessmen have said, attributing the trend to a shortage in supply.
Speaking to local Arabic daily Arrayah, they said this is happening at a time when the rents of buildings used for residential or various service purposes have stabilised or have even come down in some cases.
The real estate experts said the problem of high - or rising - commercial rents exists because of planning deficiencies that did not lay enough emphasis on providing commercial outlets in adequate numbers in certain areas, the report noted. They felt that the main solution to such a problem is to increase the number of commercial units to cater to the growing demand for the same and distribute these properly in different parts of the country.
Dr Abdulaziz al-Hammadi, chief executive officer of a local firm, attributed the increasing commercial rents to the limited number of units available, high land prices and the steeps building costs, according to the daily.
He said due to the limited numbers of units available, some owners try to exceed the annual limit of increase rent of 10% to up to 200% and higher, which prompts tenants to turn to courts to get the issue resolved.
However, he also pointed out that returns from commercial rents have dropped for owners even though rents are high; this is due to the high costs involved in procuring commercial plots. “This, in turn, has made many real estate investors opt for residential buildings due to the relatively lower price of plots as well as lower fees.”
Khalifa al-Mislamani, a real estate expert, said regarding residential, administrative and services buildings, rents have dropped by as much as 35% in some cases and there are units available in key locations. On the other hand, the limited availability of commercial space has led to a rise in rents for commercial outlets as the supply does not match the high demand, he points out.
This, however, does not apply to all parts of Doha as the rents have remained reasonable in some areas as compared to the more upscale neighbourhoods, it is observed.
Qatari businessman Ahmed al-Khalaf observed that the number of commercial outlets and spaces has increased with time but is still not enough to meet the growing demand in some areas, especially those with high population density. He stressed that there is a need for a “parallel expansion” of commercial streets to meet the expansion of residential areas to resolve the problem.
In addition, there should also be greater focus in this respect on areas outside Doha, he added.
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