Report: Upcoming retail glut expected to benefit Qatar shoppers
Qatar residents may soon start seeing more vacant storefronts inside Doha’s shopping centers in the coming years, as developers continue to construct more retail space across the city, according to an international real estate brokerage firm.
As Doha’s retail sector expands at a frenetic pace, analysts predict that a wealth of new international chains will enter the market, attracted by new malls and soon-to-be unoccupied storefronts inside of some popular centers.
In its mid-year market overview of Qatar, Colliers International said that some 1.48 million sqm of leasable retail space is slated to hit the market between 2013 and 2020.
To put that number in context, that’s the equivalent of roughly 10 Villaggio malls, and would nearly quadruple the current amount of organized retail space in Doha.
Supply to exceed demand
While Doha’s young and affluent population is driving an expansion of the city’s retail sector, the rapid pace of new development nevertheless means that the city’s supply of shopping space would start to outstrip demand from merchants as early as next year, according to Colliers.
If the projects are completed as scheduled, this is likely to lead to higher vacancy rates and place pressure on mall owners to lower their rents, the commercial real estate services firm added.
For shoppers, it could open the door to new retail chains establishing a presence in Qatar, said Stuart Gissing, Colliers’ regional director for the Middle East.
Currently, he said Doha is under-represented by global and regional brands, in large part because retailers can’t secure space inside the premium location that they desire when debuting in a new market.
“Along with more destinations for customers to come and visit … you’ll start to see a greater variety of brands,” Gissing told Doha News.
Indeed, the opening of Ezdan Mall earlier this year also heralded the arrival of several new chains in Qatar, including Aeropostale, Forever 21, Northface, Children’s Place, Sharaf DG and popular Canadian coffee shop chain Tim Hortons.
Currently, Doha City Center, Villaggio and Porto Arabia combined account for nearly two-thirds of all the shopping space in “formal” or “organized” retail destinations in Qatar, according to Colliers.
The city’s established malls – namely Landmark, City Center and Villaggio – are all effectively fully occupied and have long waiting lists of potential tenants, the firms adds.
Villaggio is the most popular mall in Qatar in absolute terms, attracting 16.8 million visitors in 2012, according to Colliers. That’s followed by City Center, at roughly 14 million.
But these malls are about to face new competition, including:
- Gulf Mall, next to the recently opened Ezdan Mall, which will contain 160,000 square meter of retail space and is believed to be nearly complete;
- The under-construction North Gate Mall, which is further up the Doha Expressway and scheduled for completion in 2014, according to several contractors involved in the project. Development planner Thomas Consultants said it will be the “premier shopping and leisure destination in Qatar” and contain 100,000 square metres of leasable space. Developer Habtoor Leighton Group said the $290-million first phase is comprised of a podium containing a two-level carpark, a three-level mall as well as a half-dozen five-story office buildings, all totaling 375,000 sqm;
- Tawar Mall, on Al Markhiya Street, just east of Landmark Mall at Arab League Street, which is projected to open in the fourth quarter of 2014 and contain 82,500 square meters of leasable space. The mall is slated to include a 12-screen 3D cinema, a food court with seating for more than 1,000 people, a four-star hotel and a 7,000-square-meter hypermarket;
- The Mall of Qatar, which is roughly one-third complete and is scheduled to open in 2015. It bills itself as the largest shopping center in the country with more than 162,000 sqm of leasable space across three floors. It is located on the Al Rayyan Highway, 10 minutes past Education City. More than one-quarter of its shopping space is expected to be filled by retailers that are new to Qatar, its general manager recently told Gulf Business;
- Doha Festival City, which rivals the Mall of Qatar’s quest to be the biggest shopping center, with a projected 260,000 sqm of leasable space. Its first phase consisted of the Ikea off Al Shamal Road north of downtown Doha. Officials have pushed back its opening date two years, to 2016.
What stores would you like to see in Doha? Thoughts?