Qatar: A winning formula

As the first Middle Eastern country to be given the honour of hosting the prestigious Fifa World Cup 2022, Qatar has certainly done wonders for the region. Following the announcement of this huge achievement, the state is so determined to succeed that, despite pessimists' concerns about the lack of infrastructure in place, over $100 billion is expected to be spent over the next five years in a bid to ensure everything goes to plan.

With such vast investment in the country, and with a promising future ahead, it appears that Qatar is a very exciting place to be right now. 

Games attraction

"Today everyone in Qatar is indeed excited about the Fifa 2022 games," says Jasmine Smith, general manager, Qatar Sotheby's International Realty.

"New stadiums will be built for the event using green technology to keep the fields playable in the climate; Doha will also experience a new airport which is currently under construction that will feature no queues or lines. These will have a great impact on Qatar employment opportunities, tourism and hospitality, manufacturing, retail, real estate and will certainly stimulate the economy. Based on reports, there are currently over 240 projects with 58 per cent under construction which includes Doha's international airport, Education City and the Shell Pearl project."

For oil giant Shell and Qatar Petroleum, whose Pearl project is said to be costing somewhere around $18 billion, it will bring the largest gas-to-liquids plant in the world to Qatar next year, resulting in yet more kudos for the country. As the world sees a slump in property prices all over, such an overhaul is just what is needed to bring a revived outlook onto the market. 

Property development

Smith claims, "There have been a number of mixed reports on the Qatar real estate market but there has never been a doubt that the Qatar real estate market is set to grow at a faster pace than those in the neighbouring countries. Based on various reports, with the Qatar Government allocation of $130 billion to finance infrastructure and related real estate projects over the next few years, we can only anticipate the property sector growing healthier and shinier than ever before, backed with an increase in demand to surpass supply."

In general, Smith adds that Qatar has been looking to carry out a methodical diversification of its economy, and the Fifa World Cup will help with such plans.

While the infrastructure to cope with the forthcoming demand is in progress, there are also residential and lifestyle projects burgeoning in the country. Lusail City, located around 15 kilometres north of Doha, which comprises 37km of waterfront, is expected to accommodate 200,000 residents when it is complete in approximately 2015.

"Lusail City is set to offer 19 uniquely integrated districts with vast retail, entertainment and leisure components with approximately 9,000 room keys and five training sport facilities located in its various districts," says Smith.

Of course, The Pearl — Qatar was one of the first of a new era in developments to arrive on Qatar's shores and has already proved a success.

Smith explains, "The Pearl has already proven to be a popular location offering infinite variety, comprising three main marinas that are set within distinct residential zones, each with unique characteristics and great lifestyle features."

And thanks to these first-class facilities, The Pearl is currently a popular rental destination.

Janet Parry, manager of Direct Real Estate, Doha, says, "Despite a significant drop in rents of up to 30 per cent during the first two quarters of last year rental prices, especially those in West Bay, West Bay Lagoon and The Pearl, stabilised in anticipation of the 2022 announcement which later proved worthy. The ongoing handover of units inside the Pearl has somewhat prevented an oversupply of residential units as the influx of expat workers has been steady."

However, while rents have stabilised, Parry admits that high-end tenants with budgets of 15,000 Qatari riyals and above have recently found worthwhile bargains on the Pearl. 

Rental demand

"Rental prices of conventional villas and flats of all categories in other parts of Doha remain reasonable and are unlikely to increase. Apartments within the 6,000-8,000 riyals range within the areas of Al Sadd, Bin Mahmoud, Mansoura, Mugalina and Najma have been very busy.

Compound villas within the 12,000-18,000 Qatari riyals range within the Abu Hamour and Al Waab areas have seen fast turnovers lately," she says.

Fortunately, to fill this wide range of property comes a mix of tenants and investors within Qatar.

Smith says, "70 per cent of expatriates generally prefer to live in medium-sized residential properties, while the Qataris prefer larger accommodation. This provides us with the opportunity to cater to larger audiences and ensure alignment of our inventory accordingly. As for most of our local purchasers, they comprise a healthy mix of end users and investors."

While there is no doubt enough inventory for the moment, this could well change exponentially, as we near 2022 and demand increases.

Perhaps this is why, for anyone looking to invest in Qatar right now, Parry feels that it is a good investment, although only for those who are looking for long-term income through rentals. But this isn't a bad thing as Parry concludes, "The minimum rental ROI [return on investment] remains at an average of eight per cent.

With the prospects of Qatar 2022, the stable market will remain with a secured tenure at least for the next 12 years." 

Upcoming infrastructure

While the World Cup in 2022 will result in thousands of visitors arriving in Qatar, the completion of the much-anticipated 40km Qatar-Bahrain Causeway, a $25 billion rail network and the aforementioned ongoing airport construction, will make travel in and around the state much easier.

So with easy access, promising infrastructure, and a prestigious sporting event, which the whole world will be watching, this could just prove to be the winning formula that this Gulf state has worked so tenaciously for.

Homeowner view