City update: Doha

Development in Doha might reflect national trends but the Qatari capital still looks a safe bet for long-term regional investment.

This has seen an overall slowdown in the Qatari construction industry, but 2009 has still seen the hydrocarbon-rich country grow.

A report from Business Monitor International issued in Q4 said that the construction industry would grow by 5% in 2009, saying “one of the best prospects for growth in the infrastructure sector in the Middle East in 2009.

Despite a further downward revision to our forecasts for the country in 2009, we are still optimistic for the sector’s potential, and thus expect it to achieve one of the highest growth rates in the region.”

Like many other GCC cities, infrastructure seems to be the key area for growth. The under-construction US $14 billion New Doha International Airport is still on schedule for 2011 and will cover over 22 kilometres outside the city.

Residential development, however, is likely to be off the agenda for some time to come. An oversupply caused by an extra 5,000 new properties and a decline in people moving to Doha as a result of the economic slowdown has seen rental prices plummet by 35% over the last year, according to a study by Century 21 Qatar.

Meanwhile, other reports suggest that prices could fall by a further 15%, according to The First Investor Asset Management as a further 10,000 homes come online next year.

“We expect 2010 to be the bottom of the market in terms of prices but we don’t necessarily see any upturn in 2011 as being aggressive because of the supply coming in,” says Keith Edwards, head of asset management at the investment bank.

As a result, improving the quality of the existing city centre comes high on the agenda. Demolition work to clear space for the $5.5 billion Heart of Doha development is in full swing, with construction work expected very shortly.

The project represents work by Allies and Morrison to improve how easy it is to live in Doha as a pedestrian.

“We are witnessing Doha beginning the rebirth of its city centre. But to do this it needs to bring Qatari families back into the city centre and become more pedestrian-friendly,” says A&M partner Tim Makower.

“The West Bay district of Doha is not very pedestrian-friendly and so it has become a car dominated area. We need to encourage people to spend less time in their cars.”

Top projects                                                  US$
New Doha International Airport                 $11bn
Lusail                                                              $5.5bn
The Pearl Qatar                                             $5bn
Doha Metro                                                     $3bn
Doha Convention Centre and Tower         $1.5bn