Al Naimi: Qatar’s solid economy boosted real estate market’s resilience
Al Baker: Population growth one of most important economy drivers
Sunday 31st January 2010 will be the last day for subscriptions to the initial public offering (IPO), of Mazaya Qatar Real Estate Development Company (QSC), which commenced on 17th of January as the first IPO in Qatar for 2010. The company has put up 50 million shares – representing 50 percent of its total capital – for public offering to raise QR500 million that will be used to fund a number of real estate projects negotiated, in line with the demand of the Qatari real estate market.
Commenting on the occasion, Mr Rashid Fahad Al Naimi, Chairman of Mazaya Qatar, said that the impact of the global financial crisis and the economic recession was at its lowest levels, and that the Qatari economy and real estate market is currently showing signs of stability and is expected to revive in the second half of 2010.
“All indicators continue to show that Qatar is one of the most important countries in the entire Middle East region, particularly within the GCC. We have offered all the necessary incentives for direct and indirect foreign investments, as both types can help boost the Qatari economy. The Government has also reduced taxes on foreign companies and eased restrictions on foreign companies’ ownership in some economic sectors,” he added.
Qatar has been able to boost confidence in its national economy and to upgrade its Sovereign bonds rating to be among the highest in the region, according to Moody’s Ratings. The huge amount of local and foreign investment being pumped in to expand existing companies and establish new ones has increased demand for real estate components such as commercial and residential units. Qatar’s real estate sector is one of the fastest growing sectors in the country’s economy, with 33.4 percent growth between 2003 and 2008.
Mazaya Qatar’s General Manager Seraj Saleh Al Baker pointed to the demand–supply gap in residential and commercial units, which has led to a reduction in the costs of property units and thus prices. He added that the diversity of and increase in government spending – which totaled about QR36.8 billion in the first quarter of 2009, compared to QR21.5 billion in the fourth quarter of 2008, with a large portion being spent on industrial and development projects such as oil and gas, healthcare, tourism and transportation – has also boosted demand for real estate units.
Said Al Baker: “The demand–supply gap will be narrowed and the government spending, which aimed to diversify the economy and develop the healthcare, tourism and transportation sectors, will continue pushing the demand for office space for the foreseeable future. The government sector will continue to dominate the current increasing demand for office space in the short term. The current challenges faced by most players in Qatar’s real estate market will limit the execution of new projects and put some current projects on hold, leading to a future demand–supply in balance. The commercial and retail sectors have seen wider gaps between demand and supply, and the short supply of retail outlets has led to expansion projects for two major shopping malls. These developments in office space and retail outlets will further stabilize the rental market for these sectors. We expect Doha to witness a relatively strong demand in the short and medium terms as a result of the large influx of expatriate workers and the government’s announcement of infrastructure enhancments”.
Al Baker stressed that an increase in population is one of the largest economic growth drivers. “According to the Economist Intelligence Unit (EIU), Qatar’s population is projected to reach 1.8\ million in 2010, and 2.8 million by 2020. The year-on-year population growth in Qatar increases demand in most economic sectors, particularly in the services sector. The continuous and dynamic growth in economic and tourism activities are among the main drivers of the real estate sector growth. Other factors are population growth, consumer spending, legislative system developments, private sector encouragement, investment spending and public spending,” he said.
Mazaya Qatar has signed a Memorandum of Understanding (MoU) with Qatar Foundation for Education, Science and Community Development and the Qatar National Convention Center (QNCC) to provide for the latter’s staff accommodation needs. According to the terms of the MoU, for a ten year period, Mazaya Qatar will have the exclusive right to provide or source 324 housing units for the QNCC.
