29 July 2010
DOHA: Villa rents are likely to plummet further as businesses other than beauty parlours, nurseries and health clinics currently operating from villas in residential areas have been asked by the government to move to commercial premises from November this year.

A lot of villas currently being used as offices are expected to be vacant as a result, and come on the rental market for residential use, thus adding to already abundant supplies.

Real estate experts say they expect the villa rental market to receive a further jolt by the year-end and a serious spillover impact might also be felt by apartment rents. "As people might move to villas from higher-end apartments, their rents might also come down, as housing supplies already far exceed demand," said a real estate expert.

A lot of law offices and audit, engineering and architectural consultancies are housed in villas in residential colonies. They were allowed by the government to operate from villas when there was a serious shortage of commercial space.

But now that commercial space is available in plenty (estimates suggest something like 1.7 million square metres of commercial space is available all over Doha), these offices have been asked to move from the villas.

Abundant supplies of commercial space have led to a considerable drop in rentals. From QR400 per square metre during the time of the shortage, for example, the rent in the towers area of West Bay has come down to between QR180 and QR200.

Small offices operating from villas would nevertheless be paying three to four times what they are paying as rent for villas.

"The average monthly rent of a villa for commercial use is between QR20,000 and QR25,000, while in the West Bay, this would work out to between QR60,000 and QR80,000 at the minimum. We small businesses can hardly afford such rents," said an official of a law firm operating from a villa. The rent for a villa for residential use is between QR10,000 and QR12,000.

The Ministry of Municipality and Urban planning has already stopped issuing new licences to consultancies that want to operate from villas.

Beauty parlours, nursery schools and clinics will also be licensed to operate from villas based on the requirement for these facilities in a residential area. If civic authorities assess a particular locality has adequate facilities, a new permit might not be given.

By Mohamed Saeed

© The peninsula 2010