Doha has become a building site, whose massive growth is being fuelled by the global dash for gas. Ten years ago it was a sleepy little backwater, but early this century Qatar’s gas sector development took off when it began signing deals with multinationals. Plans to change the face of Qatar by 2009 were made public when the Emirate’s ruler, Sheikh Hamad bin Khalifa Al Thani, set up the Public Works Authority (Ashghal) in January 2004 to oversee “a total change in the existing landscape”.
Qatar’s ambitions are apparent in its plans to host the Asian Games in Doha this December. Despite reports that facilities will not be ready on time, huge public and private sector investment has driven construction companies to make up for lost time; Doha is already transformed – if somewhat chaotic in the Games build-up – as a result.
The demands of hosting the Games have given momentum to ambitious plans: in spring 2006, Ashghal revised the investment cost of its five-year infrastructure upgrade programme to $8.45bn, an increase of $964m on the original forecast. Of the total projected investment, about $2.06bn is to be spent on new buildings.
New laws have ensured that Qatar keeps pace with its Gulf neighbours in the property ownership field and, with Doha a building site, foreigners are gradually being allowed in on the act. In June 2004, Qatar revised its laws on property ownership. The amended law (No 17 of 2004, Article 3) states: “A non-Qatari may own real estate in The Pearl of the Gulf island, the West Bay Lagoon and Al Khor Resort Project.” These are all special-purpose real estate developments within the greater Doha area.
Under a new law passed in February 2006, Gulf Co-operation Council (GCC) nationals can own land and residential units in three designated areas – Lusail,
Al Kharayej and Jebel Thiyab – and non-GCC nationals can lease properties for 99-year periods in 18 areas across Doha (Musheireb, Frij Abdul Aziz, Doha Jadeed, Ghanem Al Qadeem, Al Rifa, Al Hitmi, Al Salata, Bin Mahmoud, Rawdat Al Khail, Al Mansoura and Bin Dirham, Najma, Umm Ghuwailina, Al Khulaifat North and South, Al Sadd, New Mirqab and Al Nasser, areas around the Doha International Airport, Al Dafna and Onaiza, Lusail, Al Kharayej and Jebel Thiyab.)
These laws will allow foreigners to invest in property developments in the future, but the current real estate situation in Doha is difficult and there is a scarcity of well-built residential and commercial property.
“At the moment the housing situation is dire. It’s virtually impossible to find flats and villas, and what’s available tends to be low quality or far out of town, with the unifying characteristic of being very expensive,” one expatriate employed in Doha’s construction industry complained.
Average rents in the housing sector have been pushed up, rising by 47% between 2003 and 2005. Qatar’s increasing population has placed a huge demand on existing properties at the same time as Doha has lost much of its low-cost inner city housing stock. This catered for lower paid expatriates and was bulldozed to make room for new roads and parks.
“Supply is extremely deficient in the residential sector at present, leading to a drastic increase in rents,” said Kuwait’s Global Investment House (GIH) in a report issued in September 2006. It said that it did not expect the residential demand/supply gap to narrow in the short term.
Things will improve. An IMF report on the Qatari economy, issued in September 2006 but not fully published, blames rising costs on infrastructure constraints in the construction sector, but notes that “inflation is expected to ease slightly to around 7.5% in 2007 as more housing comes on stream”.
Steven Flint, head of property business at Commercial Bank of Qatar, says: “There remains a shortage of good quality residential property in Doha at the present time… [but] new compounds are coming on stream, as are numerous low-rise apartment blocks, so supply should be eased considerably by the end of 2007.”
Although rents increased by about 40% in 2005, this was not sustained throughout 2006, primarily due to a maximum 10% annual rental rise placed on landlords by the government, says Mr Flint.
Several Doha residents interviewed for this publication believe the situation will ease after December 2006, when the Asian Games are over. “The accommodation situation will improve when the many Doha Asian Games organising committee personnel leave town,” says one local observer.
Several mixed-use developments are under way, including the Qr4.7bn ($12.9bn), 1.2 million square metre (m2) Al Waab City, designed by US-based Hellmuth, Obata and Kassabaum, and described by its promoters as a “community with a heart”.
Launched in December 2005, Al Waab is being developed by Al Waab Development Company, run by Sheikha Hanadi Nasser bin Khalid Al Thani, a prominent Qatari businesswoman, and her brother, Sheikh Nawaf. It is located in Doha’s southern suburbs, bordering the major Salwa road, and away from the more flashy developments near West Bay, such as Lusail.
Carla Issa, Al Waab’s operations manager, brushes off worries of competition. “The West Bay area will be more in line with a financial district, and thus we will not be competition. We are located in the centre of the city and the fact that Al Waab’s residential area is close to the commercial area will attract those people who like to live close to work. The largest schools in Doha are located across the street,” she said in an interview.
With the whole project due to be completed by 2009, Al Waab City is clearly targeted at Doha’s booming population, and will eventually accommodate about 10,000 people. About 38% of Al Waab will be devoted to residential property.
Villas (about 600) have been divided into three categories: large (890m2), medium (500m2) and small (376m2). The large villas will be up for sale, while the remainder of the residential real estate will be leased and rented, says Ms Issa, but foreigners will not be able to buy for the time being.