Qatar still looks good on the consumer side and could challenge the UAE, specifically Dubai, as the region's most premiumised consumer sector over the next few years. Thanks largely to a very strong energy sector, Qatar is extremely wealthy on a per capita GDP basis as the chart illustrates . There is already plenty of luxury - goods retail space in and around the capital Doha that caters easily to the engrained disposition among cons umers towards expensive brands.
Politically, our Middle East team believes the biggest beneficiaries of the Arab Spring have been the politically stable hydrocarbon-rich states in the Gulf. In particular, it is apparent that Qatar and the UAE have benefited from investors' fundamental reappraisal of risk perceptions of the Middle East and North Africa as they remain the only two countries in the region that have yet to experience any anti-government protests, thereby becoming 'safe havens' in a volatile region.
|Modest Population The Main Drawback|
|Qatar GDP Per Capita (US$) And Population (mn) - Historic & Forecast - 2007-2017|
Qatar's biggest weakness is the size of its population at about 1.7mn. Nevertheless, given how much money people spend, high-margin, ultra-luxury goods investors can still find opportunities. It is important to note that given Qatar's explosive growth trajectory over the past decade, the consumer sector is arguably in continual catch-up mode, despite plenty of consumer-targeting investment being poured in. This discrepancy should narrow over the next few years.
Expats Are Key
As in the UAE, Qatar has a wealthy expatriate population that is importing Western tastes and preferences, which continues to create opportunities on the consumer side. Developing tastes and preferences, combined with high income, will continue to provide an ideal platform for luxury retailers to enter and increase their store presence. A lot of spending is also expected in anticipation of the football World Cup in Qatar in 2022.