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Sunday, March 7, 2021

75% of completed Pearl-Qatar units sitting empty, UDC figures show

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Pearl Qatar

Despite adding new residents daily, roughly three out of every four completed housing units at the Pearl-Qatar are currently vacant, according to the project’s lead developer.

Most of the occupied units are concentrated in and around the more completed zones of the man-made island that have shops and restaurants, such as Porto Arabia, said Roger Dagher, a spokesperson for United Development Co., on the sidelines of the annual Cityscape Qatar real estate exhibition.

He rejected the characterization that occupancy rates are currently low, saying many people are simply waiting for construction to wrap up in certain areas and amenities to be developed.

“As we complete each district, it will be full,” he said. “The more construction is complete, the more people move in.”

The Pearl-Qatar is being built in stages and is set to contain a total of 18,831 villas, apartments, chalets and townhouses when construction is completed in 2018.

So far, between 11,300 and 12,250 units have been completed, according to Dagher. Of those, he said between 3,500 and 4,000 are occupied.

If current trends continue, the empty units should be absorbed in the coming years, as property owners are presently taking possession of some 1,000 units each quarter, Dagher said.

Officials have previously said that slow Civil Defense approvals had prevented some restaurants and residential towers from opening.

Strategy questions

While UDC is developing parts of the Pearl-Qatar itself, including the fully occupied towers four and five in Porto Arabia, its business model involves selling some land to other contractors.

Most recently, an unnamed developer purchased 47 undeveloped plots totaling 103,000sqm in the Costa Malaz area in April for more than US$398 million (QR1.5 billion).

However, that business model has caused UDC headaches in the past. It’s had to take over projects, such as towers 3A and 3B in Porto Arabia, from developers that ran into troubles, according to Dagher.

In a presentation earlier in the day, the Pearl-Qatar’s general manager of asset management, Ateeq Al-Khulaifi, said other developers – not UDC – were to blame for delays in developing the island, which was initially supposed to be completed by 2011.

Affordability

The Pearl-Qatar is one of several luxury residential developments targeted at well-off Qataris and expats. Some observers say the focus among builders on the upper end of the housing market has led to a glut of high-end accommodations even as more affordable options remain scarce.

While rising rents are already a concern for many foreign workers, it’s set to become an even greater problem in the coming years as Qatar’s expat population continues to rise.

During a panel discussion at Cityscape today, Ramy Echo, the chief investment officer of Kuwait-based Alargan Investment Co., said, “Qatar has to address the issue of affordable housing.”

Pearl Qatar

Echo said his experience elsewhere in the Gulf suggests that the only way to increase the stock of more modestly priced homes with land prices at their current level is through public-private partnerships between developers and government.

Specifically, he said authorities need to provide property at a discount or give contractors favorable financing.

“We categorize ourselves as a middle-income, affordable developer. It’s worked, only because of government support,” Echo said.

But discounted land sales can create other problems, pointed out audience member Robert Lee, the Canadian-based managing partner of Hemi Capital.

Cheap, undeveloped land is typically located far outside city centers and major employment hubs and lack public transportation options.The low and middle-income workers who most need affordable housing options would likely struggle to afford private vehicles to take them into the city for work or for any other reasons.

Echo agreed, saying the value of low-cost accommodations could be undermined by high transportation costs and that planners must look at the total occupancy costs – not just the sticker sale price or rental rates – when promoting affordable housing.

Thoughts?

52 COMMENTS

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Jaded
Jaded
6 years ago

Maybe not enough people are moving in because they don’t perceive it as good value for money, regardless of how complete the overall construction is. The few people I know who live there often complain of inferior building quality and service

Michael L
Michael L
6 years ago

Yes have heard exactly the same: poor build quality, noise from traffic and really bad traffic getting in and out. Sounds like poor value to me, a shame could have been a really impressive development. Seems like its turning into a white elephant.

Michael Fryer
Michael Fryer
6 years ago
Reply to  Michael L

Dirty beige elephant.

Jimjam
Jimjam
6 years ago

By my calculations there are 7-8 thousand units empty, which are being taken up at 1,000 per quarter. This means that the existing units at current uptake will take two years to fill. Therefore as more units are completed a further glut will continue. If they reduced the rents by 2,000 per month, I would anticipate that uptake would double, increasing the revenue for developers and also reducing the pressure on the existing housing stock outside of the Pearl, and therefore making it easier to for not-so-rich expats to move into larger, and more pleasant accomodation. This in turn means that the really run-down apartments can be emptied due to better and housing being available, knocked-down and re-built.
That’s my opinion my, for what it’s worth.

wee_johnnie
wee_johnnie
6 years ago
Reply to  Jimjam

You need to factor in those residents that are vacating the Pearl to live in other parts of Doha when their contracts are renewed.

Jaded
Jaded
6 years ago
Reply to  wee_johnnie

Good point, I can’t seem many of the current residents who always complain about noise, quality, service renewing, especially since the renewal will surely come with an increase

MrJames
MrJames
6 years ago

As a general rule, expats don’t come to Qatar to live in high-end apartments and pay dearly for the privilege. They come here to make a good tax-free income and save as much as they can.
Correct me if I’m wrong, but a high-price apartment in The Pearl is simply not a part of most peoples life plan. It’s actually counter to it.

Bursin
Bursin
6 years ago
Reply to  MrJames

Couldn’t think of anywhere worse to invest my money. An artificial island with artificially inflated prices. I can honestly say I wouldn’t even live there if it was free! Badly built, poorly serviced, lawless island. Hardly the “pearl” of qatar.

truth.e.ness
truth.e.ness
6 years ago

One way in, one way out. Traffic. Limited shopping options and an absolutely unbearable commute to the rest of the city. Unfinished buildings and cranes all around for a view. Promised restaurants and services opening and being told they have to close or having their products taken away on a whim. The usual poor quality construction you get with unskilled labor that is standard for this city with a higher price tag. I’m surprised 25% of the units are filled and I would speculate that the true figure is even lower. It’s a ghost town out there.

fullmoon07
fullmoon07
6 years ago
Reply to  truth.e.ness

somebody time ago, said that there was plenty of people since it went dry…..but facts don’t show it…..

AEC
AEC
6 years ago
Reply to  fullmoon07

It’s not dry. Last time I got in an elevator there it was half full of water.

observer1356
observer1356
6 years ago
Reply to  AEC

half-full of water??? and you managed to get in?? hmmmmmm – that’s strange, if not an unrealistically exaggerated observation.

osamaalassiry
osamaalassiry
6 years ago

“Affordable housing” and “the pearl” in the same sentence???? Really?

MIMH
MIMH
6 years ago

This is such a contradictory article. The pearl is a joke. Who would pay the money for apartments when there is no law to protect you as a foreigner and no right to stay here indefinitely.

It is over priced and poor quality, people are not stupid. (Well some are)

Don’t forget the elephant in the room. The banning of alcohol at restaurants made the Pearl less desirable for some especially the western expats who could afford the places.

Only idiots buy or rent there

sadam
sadam
6 years ago
Reply to  MIMH

i think if you’re a foreigner and you purchase a property at the pearl they’ll be handing you a 99year residency permit …

John Laprise
John Laprise
6 years ago
Reply to  sadam

Until there is a policy change…

Michael Fryer
Michael Fryer
6 years ago
Reply to  sadam

The Residency Permit that you get from owning a property will prevent you from working. I knew someone who purchased a property on the Pearl, thinking it would be nice to spend the winters here away from Europe. But then they couldn’t get their bank account sorted, since they had no sponsor. They also couldn’t own and insure a car or get a driving license, or a liquor permit etc etc. In the end they realized that they had no choice but to sell it and buy a place in Dubai. The rules for ownership here are still in need of ‘refinement’.

sadam
sadam
6 years ago
Reply to  Michael Fryer

refinement might as well sound like forget-it.

Michael Fryer
Michael Fryer
6 years ago

Maybe another reason not too many people live there is that the only people who can afford it are well paid people whose company already gives them accommodation. Or they are people with families, and The Pearl simply doesn’t compare to the quality lifestyle that you can find living in a quiet compound.
Or then again maybe it’s because the developers hired the cheapest possible laborers to do the fastest possible job, and consequently the quality is rubbish compared to other, cheaper, accommodation.

Diego
Diego
6 years ago

The place was not meant for anything other than high end rent in the same sense that a Ferrari California was meant to be an “affordable Ferrari”.I have also seen companies let new villas and apartments stay vacant for long periods anticipating maximum rents as well. Lavendar Village is Gharafa was an example.

ex_pat
ex_pat
6 years ago

Well, I think it’s fair to say that normal Supply & Demand economics don’t apply here. Funnily enough, we were always told by the building owners that occupancy rates were sky-high.

Having lived in a few places in Doha including the Pearl, I was always pretty appalled by the build quality.

dubious
dubious
6 years ago
Reply to  ex_pat

It’s funny how frequently the housing and office space shortage is held up as what is driving rents when everyone can see there it a glut of empty properties around. Scarcity economics are definitely not in control here and it seems that landlords prefer to keep property empty than let prices dip to realistic levels.

ex_pat
ex_pat
6 years ago
Reply to  dubious

Thankfully they’re not supplying more capacity any time soon.

Oh.

Saffa
Saffa
6 years ago
Reply to  dubious

Qatar does not have a free market housing market, it’s all cartel driven and price fixing. This is known, they don’t need to artificially keep the supply low, that’s the price yanni!

Expat
Expat
6 years ago

Out of 13 comments not 1 is in support of the Pearl! As Iain James was saying, generally expats come here to save as much money as possible to send back home. Also the way I see it the Pearl’s customers are only 2 categories. 1. Qataris (who probably don’t fancy an apartment in a building full of expats and would rather build their own villa on acres of space – which makes perfect sense) 2. C suits who have their companies paying the rent. Correct me if I’m wrong but the market the Pearl caters for is pretty much nonexistent in Qatar. I’m pretty sure there aren’t 15K executives living in Qatar as well.

DEEM
DEEM
6 years ago
Reply to  Expat

I live in the Pearl. I am not a high income expat… probably somewhere in the middle. It is wrong to say living on the Pearl is unaffordable. We are paying HALF what we were in West Bay. It is also wrong to say it is noisy – we are in Qanat Quatier, we cannot see a single crane or construction site. The build quality… well only time will tell, but we are delighted with it so far… the boy racers and the noise of screaming Ferrarris are far enough away to not disturb us. Only one way in and out? Well…. yeah… its an island!!!

Its pretty, quiet, peaceful, and 25 minutes from my office in Commercial Bank Plaza – even in heavy traffic.

Would I do it again? Defintately Will I stay? Yes. Would I recommend it? Over West Bay? without hesitation.

brorick
brorick
6 years ago
Reply to  DEEM

how much rent do you pay for how many rooms?
i see west bay as a place to pay 5000-6000 a room and the pearl as 6,500+

Jaded
Jaded
6 years ago
Reply to  DEEM

If you’re paying HALF of what you paid in west bay (for comparable accommodation) you were being ripped off before, big time!

Check
Check
6 years ago
Reply to  DEEM

Thanks for giving your opinion from someone on the “inside.” We get a lot of opinions here but not a lot of intell.

koko
koko
6 years ago
Reply to  DEEM

I’m sorry I can’t believe you are paying HALF of what you were paying in West Bay… I live in West Bay in a fab apartment, great finishing, great quality, fab service and maintenance… and I still couldn’t afford the same on the Pearl if I wanted to leave the two bed I’m in now… and find the same quality…

disqus_21uQ1hXhE0
disqus_21uQ1hXhE0
6 years ago
Reply to  DEEM

If you can choose to live in the Pearl, you’re pretty high income. Consider construction workers are making a few hundred riyals a month, service workers a few thousand, and a few lucky office workers’ salaries would probably be equal to a month’s rent at the Pearl.

Expat
Expat
6 years ago
Reply to  DEEM

So the cheapest unit in the Pearl probably runs for around QR 13,000 a month. If that is is HALF what you were paying in West Bay, then that means you used to pay QR 26,000 (minimum) for an apartment a month. That means, dear, you are either trolling, or you are trolling.

disqus_21uQ1hXhE0
disqus_21uQ1hXhE0
6 years ago
Reply to  Expat

I wonder what the market would look like if companies stopped giving “housing allowances”. Qatar is the first country I’ve lived in where this happened. It seems nice, but I think landlords’ expectance that they can charge more and scoop up a large company allowance is probably inflating prices as well.

Abdullah
Abdullah
6 years ago

They should stop creating a superficial market and let the free market rule! They will fill those apartments up in no time in that way

Ben
Ben
6 years ago

Dont forget guys, the Pearl is now more popular since the ban of alcohol.
Or so they told us anyway…..

fullmoon07
fullmoon07
6 years ago
Reply to  Ben

yeah!! and we believe it!

Doha Hack
Doha Hack
6 years ago
Reply to  Ben

What a joke… Every time I have been to the Pearl shopping complex I was the only one there. It’s not popular and it will continue to suffer until it’s developers live up to the numerous promises it made to entice people to buy there in the first place. It is not oriented to families or singles – it is not therefore surprising that the occupancy is so low – it doesn’t know what it is…

EGC
EGC
6 years ago

Well, if they…erm…dropped their exorbitant rents and prices, then maybe…..

AMM
AMM
6 years ago

I don’t believe the data in this article is right, and I have my doubts from day to day experience dealing with property rentals. If you are looking for an apartment on the pearl there are only few options available, especially in Porto Arabia and it seems that there is a strategy NOT to release too many apartments so the prices will not go down. For example Quanat Quartier project is finished but they are releasing buildings gradually, one by one and only after the entire building is rented they advertise another. The standard of life you get living on the pearl is much better than in other parts of Doha however it is definitely too expensive for what you get- On the other side it’s the best you can get in Qatar if you want to leave life style closest to Western countries…Someone should investigate the fact that prices are being kept high artificially and on purpose.

djvesic
djvesic
6 years ago
Reply to  AMM

It is not even close to “the best you can get in Qatar if you want to leave life style closest to Western countries” If because nothing else then because of alcohol ban. For the same or similar prices you can live in much better apartments in al saad or even in serviced apartments all around Doha.

Namik Cafer
Namik Cafer
6 years ago

The Pearl is an interesting destination, while from the outside it looks like a magical island, the disillusion slowly crawls to you as you get nearer and inside. Overpriced cafes and restaurants, the most expensive supermarket chain, empty corridors with posters of opening soon ( 2 yrs on ) shops and cafes. The best places to live in the Pearl is the Qanat Quartier, where you don’t hear the Ferrari’s but occasionally 2 AM in the morning you get modified speedboats with 20000 W sound system, that make you wish for a RPG Launcher at hand.

Quality of the buildings can surprise you, from building time to time… But the view’s and private beaches add an extra luxury, and of the alcohol consumption, most drinkers have their little parties on the terraces and by the pools . Rents in West-bay and Pearl are competing with each other, but the Pearl has more nice views than most tall buildings in West bay.

High rents are of course part of the strategy to maximise profits in the short run, but in a city with already stretched out accommodation, there is another dark side of high rents, its discriminating racially.

Proud _Filipina1984
Proud _Filipina1984
6 years ago

<<<——- Earning minimum 5,000 riyals a month
<<<——-Living in a flat worth 6,500 with 2 bedroom/ partition rooms/ bed spacers plus 1 1/2 bathroom
<<<——-Transportation(Good Luck)

>>> EMPTY

Masboro
Masboro
6 years ago

We live on the Pearl and really like it, but there is no way we would ever buy. Its not just the ridiculous prices but the fact that the rules can be changed at any time. The original people who bought on the Pearl bought in to a model where restaurants would serve alcohol, there would be a UDC ‘booze shop’ on the doorstep, beach resort, Irish pub etc. and the promotional video showed women in ‘strappy’ dresses shopping in the Pearl shops with no hint of a ‘reflect your respect’ dress code. People were sold a dream that is nothing like the reality.

Sher
Sher
6 years ago

75% of the pearls completed units sitting empty with construction still on going! Why are 100% of Damac/UDC’s $170M Lusail project which was launched 7 years ago and completed 4 months ago still sitting empty awaiting handover with construction complete?

Mo Shehadeh
Mo Shehadeh
6 years ago

Economics 101 – Supply > Demand; prices will go down.. simple as this, let the free market rule

Paul
Paul
6 years ago

The problem in Qatar is that you only have two choices: luxury or crap both overpriced. Actually this seems to be the overall strategy: by default you get a crappy service (e.g. banks, restaurants, healthcare, Qatar airways, etc) unless you pay a premium to get treated as if you’re a VIP. (..a temporary VIP, only because you paid for it)

VivaBahriya
VivaBahriya
6 years ago

Owing an apartment en Viva Bahriya… Very happy with our investment. 7% profit per year. Why pay 15, 16 or 18.000 Qr per month when you can own?… If you are planning to live for more than ten years here in Doha, I think it is financially worth it. Best of all, we don’t have anything to do with Real Estate Business.

DickDePilot
DickDePilot
6 years ago

Poor quality build and finish with inflated prices and a ban on alcohol; Can’t think why the majority of those living in Qatar at present don’t just get up to the Pearl and buy buy buy 😉

SokhnaFan2010
SokhnaFan2010
6 years ago

Anyone seen / found details of the final road layout in front of the Pearl / Lagoona roundabout? Just check out the traffic on a weekend evening. The cars from the Pearl back up all the way across the bridge. I can see Al Khor becoming the new Jebel Ali……………………………..

Khar99
Khar99
6 years ago

Nice article.

I lived in BV apartment for about 15 months. It was fine at first. There was hardly anyone in the building so the pool and parking garage were empty. And the view of the skyline was amazing. I also worked odd hours so I did not have to face the traffic too often.

But there is a randomness to it. Things change without warning or explanation, things planned are cancelled and unless you want to pay a lot of money you need to leave the island to get most of the day-to-day stuff you want.
And of course the landlord in France refused to give me back my deposit and all I could do was call him names from afar.

It was an interesting experience and I have some great photos but I would never recommend it to anyone.

disqus_21uQ1hXhE0
disqus_21uQ1hXhE0
6 years ago

There is a deep misunderstanding by developers of the market. My neighbors are middle class and cramming two or three couples to a flat. They have decent paying jobs at large corporations, but they cannot afford to live in Doha in their own flat. There should be more diversity 1, 2, 3 bedroom flats below the 5000 QR mark that are not slumlike.

Freemantalking
Freemantalking
5 years ago

i joined one of the developers of project pearl in 2006 who invested in 9 plots and his dream was to have a dubai like city in pearl. after they had invested and started, they asked me to do the feasibility tsudy and define their product and comparability edge. to me that was a clue of how unprofessional they were and how of dreamers they were. this must be done way before you invest. i predicted that the project will not have more than 30% occupancy rate and investors wont come to boring and dull Qatar which still has a lot to develop in order to create an identity. eventually i was wright and luckily i left the company because of close minded qatary mentality and lack of vision.

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