Mat Green, head of Research and Consultancy UAE for CBRE Middle East, on mall development in Qatar
What is the current state of the retail/mall market in Qatar?
Retail demand in Doha remains very strong with the major mall developments at or close to 100% occupancy. However, with significant new retail supply set to be handed over during the next five years there is a risk of future oversupply.
For now we expect to see the established malls continue to perform very well, although some new market entrants may initially struggle to achieve high occupancy rates. As we have seen in other markets like Dubai, larger destination malls have the ability to ‘cannibalise’ the market and take away share from other smaller or aging centres.
Do you think there is enough consumer demand to support the malls underway in Qatar?
The future performance of the retail market will of course rely heavily on the country’s ability to sustain solid population growth in the coming years. However, with close to 20% GDP growth during 2011 and forecasts of around 6% for this year, the economy is certainly doing its bit to help.
The tourism sector is also expanding rapidly and that could become a major driver of retail demand, although at this stage the market remains business and not leisure led.
Is there a risk of over-saturation ?
At this stage occupancy rates remain high although with retail mall supply potentially doubling over the next five years, there is of course risk in the market. Qatar is expanding rapidly and will need to continue to achieve strong growth if it is to keep pace with the current level of construction.
Is there a certain type of mall that is in demand?
Destination malls have become increasingly popular across the Middle East region with consumers able to shop and spend leisure time within a single location. By creating entertainment centres and major leisure attractions, developers have been able to increase the dwell time of shoppers and thus also helped to drive up footfall and retail sales.
The malls have become the new social centre and are increasingly popular amongst the rapidly growing young population.