the riyal estate cover story
lot of money back into the market. There are several examples where they pumped money into the banks in terms of real estate debt to create greater liquidity in the market. Obviously this sector is one of the fundamental elements of growth of Qatar. I think at the moment there is a positive sentiment towards real estate here. We're at a stage in the market where we're expected to see growth in capital and rental values in the medium-term, so I think that positivity means that banks are more willing to lend funding to real estate projects." Mani is extremely positive: "The FIFA 2022 World Cup is a very important milestone that has opened exciting possibilities in the real estate sector, attracting local and foreign investors who are keen to tap into the wealth of opportunities associated with the numerous projects lined up for the next 12 years. Banking institutions are therefore quick to take advantage of the situation by offering more accessible and flexible credit facilities. "Moreover, we are witnessing a surge in the number of business enterprises based in Qatar, particularly in Doha, due to its economic and political stability, driving the demand for both commercial and residential space and amenities. These are all positive developments that have helped strengthen the investment potential of Qatar's real estate sector, ensuring greater availability of credit resources." Many individual investors opt for bank loans to build housing and office stock for rental income. However, despite banks becoming liberal in real estate lending, the Central Bank's rule that each bank's exposure to real estate does not exceed 15% of total customer deposits remains in place. QCB's regulations also restrict bank lending for a real estate project to 65% of a project's total cost with the remaining sum having to be organised by the borrower. Rules of ownership The 2011-2016 National Development Strategy (NDS) Plan proposes to allow expatriates become permanent residents here and ease the restrictions on them investing in real-estate. What prospects does this change in policy throw open? Proudley says, "It's at a very early stage at the moment, they have only started to release information on how the residency can be secured. There are some restrictions and we will have to see what they are to better
52 Qatar Today
september 2011
understand how it will affect the market." As of now, there are three zones that are absolute free-hold property, The Pearl, West Bay Lagoona and the future Barwa AlKhor resort. There are then 18 investment zones called 'user zones' which come under a 99year lease effectively. But there are no significant numbers being sold under those zones, says Proudley. "As of now, I think the market for expats is very much focused on The Pearl. The Al-Khor resorts are not built yet; WB Lagoon is majorly bought by locals or other GCC nationals because the
"A remarkable number of new business opportunities have now presented themselves following the announcement of permanent residency permits for expatriates. Although this will result in an increased demand for commercial and residential spaces, it will undoubtedly see a rise in expatriate business start-ups that will further boost the local economy." Abdulrahim Al-Ibrahim Director, TCAD, TPQ
sizes are much larger and they're at a much higher starting price. The prices are too high for a non-national to commit to unless they're determined to stay here long-term. I think The Pearl is the focus of the free hold market here." But Proudley feels it is still early to say what impact this change will bring. "I think it has to help to some degree as it gives people a bit more comfort. That said there are a lot of non-nationals that own property here, people who are not residents, so it won't impact them. It remains to be seen how many people take up this opportunity to gain a residency through this process." Mani is confident of the change and the aftermath, "This plan will surely make expatriates feel more secure with their investment activities in Qatar and encourage them to further enhance and expand their investments and business interests in the sector. This will also help attract more investors into the country, which will create more jobs, help sustain infrastructure development projects and provide the solid framework to achieve long-term sustainability." TPQ, Director of The Central Directorate of Development, Abdul Rahim Al-Ibrahim says of the property which first opened doors to expatriate ownership, "TPQ fulfilled its vision of being the ideal free-hold property-investment location in the region by issuing residency permits to non-national property owners, their dependents and next of kin. This will not only strengthen confidence in the Qatari real estate market but further demonstrate the commitment of HH the Emir, Sheikh Hamad bin Khalifa AlThani and HH the Heir Apparent towards the growth and development of Qatar. "A remarkable number of new business opportunities have now presented themselves following the announcement of permanent residency permits for expatriates. Although this will result in an increased demand for commercial and residential spaces, it will undoubtedly see a rise in expatriate business start-ups that will further boost the local economy." Risks in Investments Lack of products, mispricing, and limited financial availability thwarts transactions, portfolio restructuring and rebalancing of portfolio risk, according to a real-estate report by Jones Lang LaSalle. Proudley feels, "The risks are the lack of transparency in