Interview: Abdulla Abdulaziz Turki Al Subaie
What is your assessment of investor sentiment regarding the property market?
ABDULAA ABDULAZIZ TURKI AL SUBAIE: Investors generally feel very positively, as the real estate sector is set to grow, presenting many opportunities. The budget announcement for 2012-13 shows the country’s strong economic base and the large amount of expenditure, which is backed by an influx of hydrocarbons revenues.
Additionally, there is an effort to diversify the economy and develop sectors such as health, education and tourism. With Qatar’s main aim of becoming a knowledge-based economy, there is a need for professional and skilled human capital. We anticipate a large amount of jobs being created in Qatar, fuelling population growth over the next ten years. This will add to the demand for all real estate segments. Therefore investors will have to be very innovative and creative in how they present their properties so as to capture a growing market.
How are different stakeholders in the real estate and construction sector engaged in pricing projects and what trends in pricing do you expect?
AL SUBAIE: In the next 2-3 years, once the mega projects are fully underway, pricing will increase due to the pressure for raw and building materials. Currently, there are large numbers of construction firms present on the market and competition among them is very high, so pricing is very competitive. We have started to see indicators for the upswing in prices; some raw materials in March 2012 have increased in price by up to 15%. There are a number of initiatives being led by the highest level in the state to ensure enough stock for cement steel and other building materials. This is to ensure prices stay within sustainable levels.
On the other hand, the major challenge facing how projects will be priced in the coming years is logistics. We have limited port capacity, especially when it comes to bulk cargo, such as raw materials. There is a limited supply of stock yards and warehouses, which poses huge challenges to Qatar’s property market. Since the new port is not set to open until 2016, this development may not alleviate the problem fast enough.
Have real estate prices started to factor in upcoming transport projects, such as the railway plans?
AL SUBAIE: There has not been an immediate impact on real estate prices due to the railway plans.
However, investors have expressed a great deal of interest in the expansion of the railway, and private property owners are willing to provide space for stations as they are fully aware of the added equity close proximity to railway stations will bring.
With the first phase of the railway plan about to get underway the plans are surely going to have an impact on real estate prices, and I anticipate that real estate within the proximity of stations will be 10 to 30% more valuable compared to real estate further away. Access to transportation will be a huge determining factor for prices in the future.
What is the most pressing priority in terms of building codes and regulations that ought to be addressed as soon as possible?
AL SUBAIE: The priorities concern fire safety and public safety. Delivering improvements in these areas is vital considering the recent tragedy at Villagio Mall.
Businesses and the public have become very conscious of this, which is reflected in the action being taken by a number of committees.
The second aspect regarding building codes is ensuring enough parking facilities for tenants and visitors. It is important not to get into a situation where the maximum utilisation of space comes at the expense of comfort and practicality. With regard to zoning regulations, harmonisation of architecture must be addressed. Different zones need to comply with certain regulations. Finally, increased utilisation of environmentally friendly materials, as well as ensuring energy efficiency, is another top priority for us.
