MANAMA: Bahrain’s retail sector continues to grow on the back of new developments and investment inflows, shows new data by global real estate consultancy CBRE.

Total retail stock in the regional and super-regional mall category in Bahrain stood at 860,700sqm of gross leasable area (GLA) for the first quarter of 2019.

With six projects currently under construction and planned for completion in 2022, the delivery is set to increase supply by 34 per cent, further positioning the country as a regional retail destination, finds the report.

CBRE’s Bahrain Retail Q1 Snapshot expects future projects to be consistently larger in scale than existing comparables.

In 2019, only 4pc of supply has a GLA of between 80,000 and 120,000sqm, while 33pc of pipeline stock is expected to fall into this range, it says.

According to CBRE Bahrain director of strategic advisory James Lynn, retail remains one of Bahrain’s most dynamic sectors.

“Despite a relatively small population, the kingdom attracts a growing number of tourists... The launch of the Bahrain Shopping Festival – Shop Bahrain five years ago demonstrated that the retail sector is an important sub-sector in the kingdom,” he added.

According to him, the success of larger shopping malls, such as The Avenues, was a testament to the demand for larger scale retail complexes with a leisure and entertainment focus.

The popularity of open retail plazas is also gaining traction, with 21 projects under this classification and another 17 in the planning and construction phase, said Mr Lynn.

The report also shows that average rental rates for in-line units have been stable since 2015, achieving BD15.300 per sqm in 2019, down by one per cent year-on-year.

The firm found that occupancy levels across all Bahrain’s shopping malls currently stand at an average of 78pc.

Mr Lynn feels the retail supply due to come online is likely to exert some downward pressue on rents over the next 12 to 18 months.

“That said, the overall stable retail rents and positive government interventions have ignited developer confidence and incentivised investors to do business in the kingdom,” he added.

 

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