Lawyers, accountants and engineers (including consultancies) having offices in villas in residential areas of the city have been given time until early September this year to move out and shift to the posh towers area in Al Dafna.
The Cabinet issued a decision on September 11, 2007 allowing the above professionals and firms to operate from residential villas for two years on the request of the Urban Planning Authority.
The Authority’s argument was that these professionals and firms were finding it hard to get scarce office space in the business district.
The two-year period allowed by the Cabinet lapsed on September 11 last year, but it is understood that the government gave them a year’s grace period to look for office space in the designated towers in Al Dafna and shift.
Kindergartens, healthcare facilities and beauty salons have, however, been permitted to continue operating from villas in residential areas.
At least six towers in Al Dafna that have been exclusively designated to house the offices of lawyers, accountants, auditors and engineering consultancies, are ready.
But there are hardly any takers. Many more such towers are likely to come into the market this year, literally leading to a glut in this specialised segment of office space.
According to available information, no less than 750 million square metres of office space is currently available in the business district.
The abundant supply has led to a sharp drop in rents per square metre in these towers from QR400 during the real estate crisis to about QR151 now.
Real estate operators say that with the offices of lawyers, engineers and accountants having to compulsorily move from residential villas later this year, a large number of villas will fall vacant and come into the market for rent.
And since vacant villas are already abundant in number, more villas coming up for rent would worsen the situation and lead to a more severe crisis.
There are some real estate investors who have taken bank loans and built villas and furnished them hoping to rent them out to the above professionals, whose numbers have lately been going up.
According to property market operators, these investors as also the developers who have constructed apartment buildings and villas for residential purposes are in a fix due to a sagging real estate market.
“To ensure that the situation does not worsen, there should at least be some pressure on banks to reschedule the loans of real estate investors and developers,” said a real estate expert.
He said the interest margin of 9.5 percent on these debts should be reduced to six percent to give these investors and developers some reprieve.
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