Expenditure towards luxury goods in Qatar has remained strong despite the fall in GDP per capita, Alpen Capital has said in its GCC Retail Industry Report 2019. The high level of wealth coupled with rising population, an expanding tourism sector and high investments towards infrastructure development has positioned the country, which remains the wealthiest nation in the world in terms of GDP per capita, as a promising retail market in the GCC.
The country’s wholesale and retail trade contribution to GDP has remained stable over the years, indicating the growing importance of the industry within the economy. Alpen Capital has previously reported that the size of Qatar’s wholesale and retail trade grew at a CAGR of 21.6 percent between 2012 and 2017 to $27bn, accounting for 8.7 percent of the GDP. The country’s wholesale and retail trade also witnessed a 76.1 percent Y-o-Y growth in 2017 on the back of a rise in oil prices and the subsequent economic revival, compared to a fall of 14.2 percent in 2015.
Sale of personal luxury goods in the Middle East, which is primarily represented by the GCC countries, is also expected to witness steady growth of 4.0 percent between 2018 and 2023, the report added.
It also said that Qatar is increasingly becoming a hub for luxury brands, citing Qatari-brands such as global fashion brand QELA and high-end luxury health and beauty boutique store Pharmakeia as examples.
The presence of an affluent consumer base has also attracted several luxury retailers to the city. With Qatar’s organized retail space currently going through a period of rapid expansion and with a strong pipeline of mall openings, several international and regional retailers continue to establish and expand their presence in the country.
The report also said that with the likely introduction of VAT in the near future, retail prices are expected to witness a hike, which might influence the consumer sentiments and affect the profitability of the retailers.
Nevertheless, the country’s retail industry is expected to witness a significant push from the resurgence in oil prices and the booming tourism sector as it gears up to host three major sports events, including the World Athletics Championships this year, Fifa World Cup 2022, and the World Aquatics Championships in 2023.
As of end-2018, Doha had a total retail gross leasable area (GLA) of approximately 1.6 million sqm, an increase of about 974,000sqm over 2013. Of the total, Doha’s organized retail market accounted for approximately 1.4 million sqm of GLA spread across 21 retail malls.
Going forward, around nine malls are expected to open by 2021, offering customers a wide range of shopping, dining, and entertainment experiences. Some of the most notable projects include the 60,000sqm Marina Mall, scheduled to open in Lusail City at the end of 2019 and the mixed-use development project Place Vendome, also in Lusail City, which will have 230,000sqm of GLA shared by around 500 shops. Other retail developments in the pipeline include the Northgate Mall, Doha Mall, Doha Oasis, Katara Plaza, and Al Waab Mall.
Despite the increase in supply, the majority of the prime retail destinations in Qatar continue to enjoy high levels of occupancy and attract significant footfall. As a result, retail rents at prime malls and key high-street destinations have been rising.
Prime retail rents in the main retail malls range between QR250 and QR350 per sqm for smaller line stores, while rents for showroom and high street retail stores range between QR100 and QR160 per sqm depending on size and location. Increasing rents, higher occupancy in malls, rising footfalls and demand for new tenants are aiding to the development of the retail industry in Qatar, the report added.
The Peninsula
28/06/2019
