Bahrain’s real estate transactions exceed pre-pandemic levels in Q1

Bahrain’s real estate transactions exceeded pre-pandemic levels in the first quarter this year, according to a new report by CBRE, with the sector expected to show signs of continued growth.

The office sector is leading the way, but the residential and hospitality sectors are also performing well, states the real estate services and investment firm’s Bahrain Real Estate Market Review Q1-2023.

The retail sector is seeing stable rental rates, but with significant pipeline supply, further pressure on achievable rates and overall absorption is anticipated, the report adds.

Quoting data from the Survey and Land Registration Bureau (SLRB), the report notes that real estate transactions in Bahrain totalled 6,336 in Q1-2023.

This marks an increase of 14.5 per cent year-on-year (YoY), as well as an increase of 12pc quarter-on-quarter (QoQ).

The trading value, however, is reported as being BD243,144,972, which marks a 17pc decrease in the same period last year.

Looking at Bahrain’s office sector, total tracked supply of office stock in Q1 2023 was recorded at 1.36 million sqm, across all grades. Compared with the same period last year, average rental rates recorded in Q1 2023 have remained stable at BD5.25 per sqm per month.

If all planned projects are completed as scheduled, CBRE expects an increase of 2.5pc in total supply over the next 12 months, with the majority of development activity centred in Bahrain Bay, Bahrain Financial Harbour and Seef District.

In the residential sector, both average quoted apartment sales and rental rates increased by 3.6pc and 2.3pc respectively from Q4 2022 to Q1 2023. When compared with the same period in 2022, apartment rental rates grew by 1.7pc, whereas sales rates fell marginally by 2.7pc.

In terms of new additions to the market this year, the current pipeline of projects should lead to a 15.9pc increase in the total number of apartments in 2023, with the new units located mainly in the Capital, followed by the Muharraq Governorate.

Within the hospitality sector, March 2023 saw Bahrain host the Formula One’s 2023 season opening Grand Prix. The event recorded its highest attendance in its 19-year history, with 36,000 visitors on the main race day and 99,500 over the full weekend.

In addition, the King Fahad Causeway saw a record-breaking number of crossings in a single day, with 136,498 passengers travelling across from Saudi Arabia.

Nearly seven million passengers were welcomed at Bahrain International Airport in 2022, signifying a 127.5pc jump in airport traffic compared with 2021. As a result, hotel occupancy in Manama has increased by six percentage points YoY in the year to March 2023, and 4.6 percentage points QoQ.

Average daily rates (ADRs), a key hotel performance indicator, increased at similar rates both YoY and QoQ, at 6.6pc and 6.2pc respectively, whilst revenue per available room (RevPAR) increased 19.6pc compared with the same period in 2022 and 16.1pc compared with Q4.

In the retail sector, the supply of super regional and regional malls in Bahrain in Q1-2023 sat at approximately 927,000sqm on a Gross Leasable Area (GLA) basis.

Development in Bahrain’s retail sector continues to progress, with destination malls projecting opening dates in 2023 and 2024. Key additions to retail stock include The Avenues Phase 2 in the Capital and Marassi Galleria in Diyar Al Muharraq. The latter will add approximately 116,000sqm of GLA and significantly increase the Muharraq Governorate’s share of total stock, which currently sits at 19pc – set to rise to 30pc of total stock. Rental rates remained stable moving into Q1-2023 QoQ. However, CBRE is closely monitoring this indicator, as pipeline supply comes on stream, applying further pressure to average achieved rents and occupancy rates.

Heather Longden, director for advisory and transactions at CBRE in Bahrain, said: “CBRE has noted an uptick in commercial office enquiries, both in the number of requirements and the amount of space sought by organisations which should have a positive impact on the occupancy rates, particularly in quality buildings that meet the modern occupier expectations.”

“The hospitality sector experienced a boost in Q1 2023, with improvement across all key performance indicators during the Grand Prix period. The retail sector has remained stable in terms of rents, however with significant pipeline supply increasing GLA per capita in 2023–2024, we would anticipate further pressure on achievable rates and overall absorption,” she added.




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