Businesses, residents of Doha afflicted by rising rents in multiple sectors
Rents of shops and warehouses around Qatar have been soaring at an unprecedented rate lately, which has forced many of the owners of these facilities to go out of business.
Some shop owners whom JustHere interviewed for a video report last year in the Msheireb area were forced to close shop as rising rents were forcing them out of business. Most of the old buildings in the area are being demolished, for which the owners of the shops located in the area were sent an eviction notice. However, unaffordable rents along with high overhead costs have forced a number of them to shut down even before the date of their eviction. Many shop owners were reconsidering their decisions to find alternate locations for their businesses for the same reason.
Local newspapers reported that rents for shops have increased threefold in the past few years and nearly 16 times for warehouses in the Industrial Area. Commercial property owners are raising rents unjustifiably due to the shortage of shops, warehouses and small trades in Doha.
Owners of shops and warehouses around Doha though are demanding government intervention to curb skyrocketing rents of their businesses. However, some businesses that rent warehouses are not affected very severely. General Manager of Quality Food Group, Ramshad Hassan told JustHere that his company rents a warehouse in the Industrial Area from a third-party business and a rise in rent does not affect his company’s business very much. “We face an increase of 5 per cent to 10 per cent every two years. Ours is a medium-sized that has been in operation since 2002 and usually around one-third of our profit goes towards warehouse rent. We factor this into our business operations costs and try to increase our revenues in parallel. That is the only way out, there is no point complaining about increasing rents,” he said.
The problem of rising rents is not limited to shops and warehouses but is rampant across the residential real estate sector in Qatar as well. These increases are attributed to rising population and a shortage of housing units, and this trend is expected to continue according to the Qatar Statistics Authority.
Rents for wedding halls used by Qatari citizens across the country too have been escalating rapidly. Renting a hall for one night can be as expensive as QR300,000 with QR150,000 for two halls – one each for men and women. Apart from these, suppliers of other services such as catering need to be paid separately. The Peninsula quotes a Qatari resident saying that such rising rents along with other wedding expenses force some men to avail of bank loans to fund their weddings, which traps them in a vicious circle of debt.
Photo Courtesy: Mark Hunter on Flickr