Qatar’s Office Boom Continues Despite Cooling Rental Index

Doha, Qatar: Doha’s office market surged past 7.3 million square meters of leasable space in Q1 2025, driven by a wave of new completions, including Marina 31, Corniche Park Towers, and Baraha Motor City, stated ValuStrat in its recent report. However, rents continue to slide, signaling a growing imbalance between supply and demand in Qatar’s commercial real estate sector.

Anum Hassan, Head of Research at ValuStrat stated: “This quarter marks the launch of our new Office Rental VPI, designed to  provide a more granular view of the commercial sector.

Covering over 90 percent of the national office supply, the index captures performance across seven major clusters, segmented by Grade A and Grade B/C classifications. As of  Q1 2025, the office rental index registered 97.4 points, indicating a quarterly decline of 1.5 percent and a 2.6 percent YoY. 

Weighted average rents across the country stood at QR95 per sq m per month. Grade A offices saw a quarterly reduction of 1.8 percent, averaging QR116 per sq m, while Grade B/C spaces remained steady at QR67per sq m per month.”

In the first quarter of 2025, Doha’s ever-evolving skyline experienced a substantial expansion, with approximately 60,000 square meters of gross leasable area (GLA) added to the office market. With the inclusion of high-profile developments such as Marina 31, Corniche Park Towers, and a sleek new office complex in Baraha Motor City, the city’s total office supply has now surged past 7.3 million sq m of GLA.

Despite the impressive growth, rental returns have started to feel the pressure of oversupply. “Demand hasn’t kept pace with the aggressive pipeline we’ve seen over the past 18 months,” said Samir Hussein, Senior Market Analyst. “Vacancy rates are climbing, especially in Grade A segments. What we’re witnessing is a natural correction.”

Analysts noted that Grade A office spaces—those with the highest specifications and typically located in prime districts remained heavily concentrated in the Doha municipality, representing nearly 60 percent of the total. Lusail, the rising urban hub, now accounts for an additional 40.5 percent, a notable figure given its relatively recent emergence as a business district.

However, supply outpacing demand had an inevitable effect on pricing. ValuStrat’s Office Rental Index showed a decline to 97.4 points in Q1 2025, slipping 1.5 percent from the previous quarter and down 2.6 percent compared to the same period last year, when the baseline was established at 100 points. “Landlords are beginning to offer significant incentives. Rent-free periods, flexible fit-out arrangements, and even shared service packages are now commonplace. It’s become a tenant’s market, ”said Hussein. 

The average rent for Grade A offices across Qatar dropped to QR116 per sq m, a 1.8 percent quarterly dip and 2.9 percent decline year-on-year. 

The iconic business zones of West Bay, Al Sadd, and Bin Mahmood bore the brunt, with rents in these Grade A clusters dropping by 2.5 percent.

In contrast, Grade B office spaces, which generally offer lower-specification premises in secondary or suburban locations, showed greater resilience. 

While rents in this segment remained flat on a quarterly basis, they posted a modest 1.9 percent year-on-year decline. Interestingly, some secondary clusters showed signs of vitality.

The expert emphasised “We are actually seeing a revival of interest in locations like Al Khor and Al Wakrah. Grade B rents in these areas increased by 2 percent this quarter. Cost-conscious companies and startups are looking beyond the central business districts.”

As for the future, the pipeline shows no signs of slowing. An estimated 198,700 sq m of GLA is expected to be delivered by the end of 2025.

“With this much supply incoming, the market must brace for further rent corrections unless demand significantly rebounds. What we need now is targeted policy support to attract international businesses and diversify tenancy profiles,” added Hussein.