Interview: Ibrahim Jassim Al Othman
What plans does the company have to meet growing local demand? Is your strategy to invest internationally, or is the core focus Qatar?
IBRAHIM JASSIM AL OTHMAN: The Pearl-Qatar is far from saturated, and we think it is best placed to absorb growing local demand in the market, particularly amongst the growing segment of young Qatari professionals who have travelled the world, appreciate quality and are looking to invest in the local real estate market. Furthermore, to capture growth in the run-up to 2022, we will be accelerating its development pipeline and focusing investments exclusively on The Pearl-Qatar in the short to medium term. As a master developer dedicated to crafting iconic mixed-use developments, we still have to explore the many opportunities that exist within Qatar. Only when we have considered all of the possible development potential in the Qatari market would we consider chasing prospects in the international real estate market.
How will developments such as Lusail City and Msheireb Downtown impact demand in existing hubs such as The Pearl-Qatar?
AL OTHMAN: As a result of its cross-border appeal, The Pearl-Qatar is considered a national landmark for the country. A unique and fully functioning city, it is composed of a network of 13 islands and surrounded by the crystal blue waters of the Arabian Gulf. The islands’ asset value continues to climb, and as a result of the unrelenting demand we are seeing, investors continue to consider it an assured investment. The Pearl-Qatar is positioned toward those who seek recognition for their accomplishments and for those who are willing to pay a premium for living a five-star lifestyle.
So, bearing this in mind, the profile of the community at The Pearl-Qatar can best be categorised as high-tier locals and expatriates. Investors are high-net-worth individuals and the tenants are professionals and executives working in multinational companies, listed companies or are employed by the public sector.
Given anticipated reduced spending from state authorities and budget cuts, do you expect any decrease or correction in rental prices in 2016?
AL OTHMAN: The majority of the population of Qatar is composed of expatriates, with the highest density in Doha. Rental prices in the country are correlated to inflation and population growth, particularly in the mid-level and upper-tier properties. Since the drop in oil prices, an optimisation of the state’s budget has gone into effect. We have since witnessed a softening in rental prices, primarily in the family accommodation segment in key areas around Doha. This has primarily been driven by the motivation of smaller-scale landlords intending to protect their market share.
However, in an attempt not to drop headline rental values, we are seeing larger-scale landlords opting to offer promotions and incentives in order to remain competitive. Fortunately, The Pearl-Qatar has a unique and coveted market position that appeals to the upper tier of both the local and the expatriate populations, and this is a segment that is, in general, not significantly sensitive to reductions in budgetary spending.
Whether or not there is a further reduction in rental prices is dependent on how much of the mid- and upper-tier expatriate community is further affected by any right sizing and efficiency activities that may be planned in 2016. We believe most public and private sector entities have executed their manpower rationalisation activities to adjust to a softening macroeconomic environment, and so a further significant reduction in rental prices would consequently seem unlikely.
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