What is the state of foreign investor interest in Qatar's real estate sector and how does today's macroeconomic investment climate reflect this?
We are strongly optimistic vis-à-vis Qatar's robust real estate sector in general. High foreign investor interest is due in part to the government's decision to open up its various economic sectors to foreign participation and relax its business regulations. These decisive moves have attracted foreign investments on top of a wide range of incentives offered by the government such as subsidized or nominal rates for gas and electricity, no import duty on machinery, equipment and spare parts for industrial projects, tax exemptions on corporate tax for predetermined periods, and no export duty. Other factors that are further sustaining and driving this high foreign interest, and thus resulting in the residential and non-residential sectors' growth, include large government spending commitments, a fast-growing population, a stable business environment, increased consumer demand, continued progress on infrastructure projects, and robust private consumption. As a result, Qatar is now considered the fastest-growing construction and infrastructure market in the GCC. For example, the country is keen on investing in various infrastructure developments in main commercial areas such as Doha, a key financial hub in the Gulf, especially as we are in the middle of our preparations for the 2022 FIFA World Cup. The developments in Doha, in particular, are expected to create high demand for commercial office space in the capital city. Qatar National Vision 2030 (QNV2030) will result in a large growth for commercial real estate as well. Furthermore, the construction of shopping malls is on the rise due to the affluent nature of the population and a vibrant tourism sector, both of which are driving demand for modern retail facilities—particularly for luxury goods outlets. Last year, both rental and sales figures went up, driving the property market further. The local real estate sector is projected to sustain this growth momentum in 2015 and in the years to come buoyed by the country's strong economic performance.
What elements underpin Qatar's economic diversification plans?
Qatar's diversification plans are crucial to its long-term socio-economic development goals. According to the Qatar Economic Outlook 2014-16 Report issued by the Ministry of Development Planning and Statistics, the non-hydrocarbon sector, particularly services and construction, will significantly spur Qatar's economy on. Major ongoing government infrastructure projects, such as highways, expressways, train stations, drains and sanitation, health centers, and education facilities as well as other essential infrastructure for the 2022 FIFA World Cup will drive the construction segment. The country's sizable investment programs, rising population, and sound fiscal policy are expected to stimulate activities within the local non-hydrocarbon industry as well, thereby increasing its contributions to Qatar's gross domestic product. The QNV2030 is another key driver of long-term growth within the sector. To sustain this momentum, the private sector will also have to step up to play an even greater role in Qatar's economic diversification goals.
What challenges does Qatar face as it looks to maintain its impressive growth?
It is highly important to sustain Qatar's successes in various fields and look for new ways to further develop its hydrocarbon resources as well as its non-hydrocarbon sector. With a committed leadership, grand vision, and robust and mutually rewarding relationships with international partners, Qatar is well on its way to attaining environmental, economic, social, and human growth and development. The realization of the goals embedded in the QNV2030 will address challenges such as balancing modernization with the preservation of traditions, meeting the needs of today without compromising future requirements, managing growth, maintaining balance between Qataris and expatriates, and engaging in good environmental stewardship. Qatar's economic outlook will remain upbeat in the years ahead, backed by strong growth, stable inflation, and large fiscal and current account surpluses.