Real estate transaction volumes ‘recovering’ in Bahrain

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Bahrain - Real estate transaction volumes in Bahrain continue to recover, finds a new report by CBRE, attributing the turnaround to stronger economic growth projections.

The Bahrain Real Estate Market Review Q2 2022, a latest quarterly report by the commercial real estate services and investment firm, notes a marginal increase in the average quoted mid- to high-end apartment rents between Q1 and Q2-2022, with rents increasing by 1.64 per cent quarter-on-quarter (QoQ); a continuation of the upward trajectory in rents seen since Q1 2022.

Meanwhile, average apartment sales rates fell 3.64pc QoQ during the same period, with declines seen in the Capital, Northern, and Southern Governorates.

Freehold apartment supply continues to increase, with an increase of 12.2pc year-on-year (YoY) in total supply anticipated at the end of 2022.

The large increase in supply is attributable to the projected completion of key developments, including the serviced residences at the Address Beach Resort in Marassi Al Bahrain.

Following CBRE’s Retail Occupier Survey for H1 2022, the firm found that average operational occupancy in sample set of malls across Bahrain fell marginally in the first six months of the year, at an average of 3.7pc lower than H2 2021.

There were, however, a handful of malls that recorded an increase.

Although footfall has reportedly increased significantly since the easing of Covid-19 related restrictions, existing supply continues to hold material vacancy rates with new supply likely to further impact the vacancy rate. Consumer trends are also evolving, with changing attitudes towards types of shopping centre experiences and the rise of e-commerce.

Within the hospitality sector, government data showns a 38pc uptick in tourist arrivals in Q2 compared to Q1 2022, amounting to an estimated total of 2.4m visitors.

These figures demonstrate recovery of 82pc in the sector compared to pre-pandemic levels.

Moreover, tourism revenue for Q2 totalled BD330.4m, marking an increase of 562pc YoY.

Additionally, tourism revenue was up 13.2pc QoQ, improving further following the positive impact of the annual Formula 1 Gulf Air Bahrain Grand Prix, held in Q1 - the first race with a live audience since the Covid-19 pandemic.

The 2022 edition of the race recorded its best ever attendance, as well as its highest ever international attendance, up 50pc on pre-pandemic figures.

The kingdom’s hospitality sector also saw improvement in key metrics like occupancy, revenue per available room (RevPAR) and average daily rate (ADR) when compared with last year’s levels.

Occupancy has increased by three percentage points, while RevPAR and ADR have increased by 31pc and 22.4pc respectively.

Analysing Bahrain’s office sector, the report found that the delivery of new office stock was muted in the first half of 2022, with scheduled completions to the year-end forecast to increase total supply by less than 1pc.

The majority of tracked pipeline supply is in Bahrain Bay and Seef District, which remain the most in-demand locations by corporate occupiers.

Responses in a regional CBRE Office Occupier Survey indicated that 66pc of companies are adopting flexible working as the new normal, 53pc are refining their workplace strategies and policies, and 48pc are focusing on improving workplace wellness and sustainability.

Nevertheless, a large proportion of companies expect their staff to spend much of their time at the office, in order to ensure high levels of productivity and that employees remain connected to their colleagues and clients.

CBRE in Bahrain director for advisory and transactions Heather Longden commented: “Although development activity in the office sector has slowed, surveys conducted by CBRE on flexible working, demonstrate the continued need for offices and, importantly, the requirement for adaptable spaces, that can accommodate evolving trends.”