Economy of Qatar

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There has been massive increase in real estate commercial market in Qatar which in the coming years is considered to grow more than twice which is mainly due to the FIFA World Cup 2022. The investment in infrastructure and real estate leading the event has been increased by developers. But the supply has been exceeded by the demand and the hotel and office segments occupancy rate is low. Due to the current economic conditions there is a low demand for office space and hotel sector has also faced a fall in rate of occupancy. As compared to other segments, the retail segment has the highest rate of occupancy and stability in monthly rents.

According to all the above observation it can be seen that Qatar is a developing country and it is working hard for its growth and prosperity so it is safe and low risk to invest in such a country as it supports foreign investments and makes sure to facilitate the businesses running in the country so they may lead to growth of country. There is a little risk involved due to the current crisis due to the allegations of neighboring countries but the Qatar government is still very strong and coping with the crisis smartly and not giving up. Therefore the risk is very low as the crisis may be there but its least affecting the business and investment opportunities in Qatar. The real estate agency is to grow more in the coming years due to the FIFA world cup and it would open doors to new opportunities and growth therefore the expansion of Qatar is predicted to grow more by the end of 2018.

3.2 investment Criteria in Qatar (845)

3.2.1 Indicators in Qatar (macro)

- Political

The legal system of Qatar a blend of Islamic and civic law. The rules and regulations are not very strict and are flexible for everyone specially the foreign investors and workers. Therefore working there or getting license for franchise is not a big issue and is done through a smooth process.

- Economic

The economic conditions of the country are very stable and striving for growth despite of the crises going on with Saudi Arabia, the Qatari government is making full use of its resources and prospering. The economic condition of Qatar is quite strong and it is not impacted immediately from the dispute but the dispute can have negative impact on the economic and financial conditions of Qatar if it persists for longer period of time.

- Social

The government and its citizens are very concerned about their health and safety therefore the company must keep that in mind and provide safe accommodation to its customers.

- Technological

In terms of technology Qatar is said to be quite innovative and this is the reason for winning bid of FIFA world up 2022. There are quite innovative projects under construction and more to come in future so there is good scope of construction in the country with innovative and latest technology.

- Barriers for new entrants

As mentioned previously that Qatar has quite innovate technology and is working on further advancement therefore the company started must also pay attention to technology and must have state of the art technology and something unique to offer to its customers in order to retain in the market and heavy capital would also be required for this.

- Bargaining power of Supplier

As for the construction industry, the main material which include steel and concrete are purchased from Saudi Arabia which travel through ship and land as well, so due to the current crisis the blockade could result in delays and increase in prices. This could also lead to shortage of material which could be a big threat for the real estate business in Qatar.

- Bargaining power of Buyers

The bargaining power of buyers keeps fluctuating, but currently it is quite low, as there is a lot of demand for residential units as the population is increasing, there is influx of foreign workers and in future due to FIFA there would be high demand of hotels and residential units from tourists too.

- Threat of Substitutes

There is great threat of substitutes as there are already huge real estate working in Qatar and the new company must have a very strong portfolio in order to retain its position in market. The company must provide services such as leasing, design, construction and advisory in order to guide its customers well and build and retain customers.

- Threat of new entrants

The threat of new entrants is relatively low as it is not easy to invest such huge capital in a rapidly developing country such as Qatar. Only an already well stable company could make such entry and survive so Damac would have low or at best medium threat of new entrants.

- Competition rivalry

The competition rivalry is of course very high as Qatar is a rapidly growing country and there a few payers in the market but they have great portfolio and providing luxurious living with state-of-the-art technology.

- Product Regulation

As for the real estate, Qatar has some specified standards and condition so that there are no malpractices. But these regulations are not very strict especially for a big company like Damac it won’t be a big issue.

- Exchange Control

There are almost no restrictions by Qatar on money transfer or foreign exchange although on transfer of excess of QR 100,000 there are some restriction and if anything is found suspicious it is looked into by official intervention.

3.2.2 Micro Environment Analysis

- Consumption Expenditure of the company

The consumers of Qatar are said to be amongst those having highest incomes in the world and they prefer a luxurious lifestyle and spend on it. The consumers mostly spend on housing and utility and food and drinks. Therefore, the real estate agency has high demand as consumers prefer to spend a lot on housing and luxuries.

- Credit Growth of the company

The credit growth rate is increasing continuously in Qatar. The major rise is through providing credit facilities to private sector. Huge amounts of loans have been provided by bank to contractors and