Bahrain’s real estate deals rise 7.1%

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Bahrain’s real estate transactions continue to grow, says a new CBRE report, highlighting a 7.1 per cent year-over-year jump in deals during Q2-2023.

Using data from the Survey and Land Registration Bureau (SLRB) for its analysis, the Bahrain Real Estate Market Review Q2 2023 by the real estate consultancy notes that the number of transactions decreased by 16.7pc in the quarter to 5,279, likely due to the Ramadan and Eid Al-Fitr holidays falling during that time.

In the residential sector, apartment rents across governorates increased by 2.1pc in Q2 2023 compared to Q1, while apartment sales rates fell by 1.1pc.

The highest rates continue to be seen in the Capital Governorate, although the Muharraq Governorate is beginning to close the gap, with newly delivered quality assets achieving higher rates, the report adds.

Villa rents fell by 1pc in Q2-2023, while sales increased by 0.6pc.

According to CBRE, office market demand is up, vacancy rates are down, but rental rates are stable.

A significant pipeline of new supply is expected to impact the market in the coming year.

Occupancy rates in Manama’s hospitality sector have increased by 11.2pc year-over-year from January to June 2023, says the report citing STR data.

The average occupancy rate rose from 46.1pc in 2022 to 51.3pc in 2023, whereas ADR or Average Daily Rate - a measure of the average revenue earned for an occupied room on a given day – increased by only 1.8pc over the same period.

Another key performance indicator, RevPAR, which is a measure of the average revenue generated per available room in a hotel, increased by 13.1pc during the quarter.

In the retail sector, CBRE Bahrain’s biannual retail occupancy survey recorded increases in the majority of the surveyed malls in H1 2023.

However, the report found that rental rates have declined by an average of 4pc, largely due to surplus retail stock across the kingdom.

With development activity seen continuing across all market segments, including super-regional, regional, community and neighbourhood retail, the additional pipeline of supply is anticipated to further dilute the market, placing additional pressure on achievable rental levels, it adds.

Heather Longden, director for advisory and transactions at CBRE in Bahrain, said the firm has recorded an uptick in registered leases within its managed office properties and a minor reduction in vacancy rates to 26.3pc.

“All key performance indicators in the hospitality sector have shown signs of improvement year-on-year and according to the BTEA, Bahrain International Airport welcomed 4,098,582 passengers during the first six months of 2023, up 43.2pc from the same period in 2022. While retail occupancy rates have improved marginally to 70pc, average rental rates have dropped in the first half of 2023 as supply of shopping centre space continues to grow,” she added.