Knight Frank Official: Oil & Gas Cornerstone of Qatari Economy

The oil and gas sector will indubitably be the “cornerstone” of Qatar’s economy in the years ahead, however, recently the government has made concerted efforts to diversify revenue sources, remarked an official. “With climate change being a major global concern, it is reassuring to know that Qatar is exploring renewable energy sources, such as solar and wind power, as part of its commitment to sustainable development,” said Adam Stewart, Head of Qatar, Knight Frank. He stressed that “Off the back of the World Cup, which by all accounts was a major success, we expect Qatar to establish itself as a destination for other major sporting and entertainment events.” The expert highlighted that the most-talked-about rental issues continue to witness correction in the market as the residential sector is poised for a major boost.

“In the run-up to the World Cup, landlords were firmly in the driving seat and enjoyed significant rental growth. We are now seeing rental rates correcting to pre-World Cup levels, which was fully expected. Supply and demand fundamentals would suggest that rental levels do have further to fall; however, the residential market usually finds a way to surprise people,” Stewart said. The expert explained that the only reason why rents didn’t correct more quickly than expected, was because the landlords, as a collective, were trying to maintain the higher rents for as long as possible. However, it only took for one landlord to lower their rent for the others to follow in order to remain competitive. In its quarterly report, the leading international property consultancy stated that the commercial market performed phenomenally well with newly-developed Lusail being a competitor in the GCC.

Stewart mentioned that “Lusail has already established itself as a direct competitor for Doha. Many Government Ministries relocated to the Marina district, and we are seeing major international occupiers following suit.” Destination Qatar’s recently published report, which surveyed 30 Qatar-based HNWIs, the Marina and Waterfront districts were also identified as the two most preferred locations for residential real estate acquisition. The official elucidated that whether or not Lusail can compete with other GCC cities, depends on the initiatives implemented by the authorities to attract foreign businesses, investments, and residents to Qatar. He emphasised that “Competition among GCC cities is fierce, and whilst other cities such as Dubai, Abu Dhabi, and Riyadh have a head start, we do believe that in the long term (Lusail) will establish itself as one of the major economic centers in the region.”

Regarding Qatar’s growing tourism sector, Stewart underscores that the country has found a way to meet the demand, with increasing accommodation facilities during FIFA 2022 and beyond, He said “Since the hotel construction boom, we have seen a substantial oversupply of hotel rooms across the sector. With the 206% increase in visitor numbers, we have already witnessed so far this year, we hope that with further increased visitor numbers from major upcoming events, the average hotel occupancy levels will increase in the coming quarters.” Steward expressed his optimism about surging tourism demand in the country by adding that “Qatar is in a rapid growth period, fueled by impressive sovereign wealth. With new tourism marketing efforts, major event hosting, infrastructure development, and changing global travel trends, we believe this figure is most likely achievable in the next 6 years.”