The leading property expert, Cluttons in its Bahrain Spring 2018 Property Market Outlook pointed out that the government’s efforts over the past years to bring more investors to the country have succeeded in boosting the country’s economy wherein 2017 economic growth estimated to have reached 3%, all of which proves that Bahrain’s growth is the strongest amongst the GCC states.
The Kingdom’s real estate sector is the first engine of its economic growth, especially retail and hospitality sectors which remain to this day key drivers.
According to Cluttons Bahrain Spring 2018 report, the retail sector in Bahrain is one of the most stable markets. The fourth edition of “Shop Bahrain” festival is what proves that the kingdom’s retails sector is running at its full swing.
The festival has succeeded in stimulating the tourism and retail sectors while achieving outstanding revenues with transactions reaching $50 million from 145,000 transactions, compared to $21 million from 130,000 transactions last year.
That’s not all, as the number of retail schemes announced this year state that the retail sector is expanding now more than ever.
Whether it is Ikea Bahrain – the biggest of its kind in the region – or the second phase of The Avenues which has been announced earlier this year or Liwan’s large retail area or Marassi Galleria entertainment centre; it is safe to say that Bahrain’s retail sector is witnessing a huge growth that is expected to go on for many years to come.
Like retail, Bahrain’s hospitality sector continues to showcase strong performance especially with many five-star hotels openings in the pipeline.
According to Cluttons report, hotel occupancies across Manama increased from 42.8% to 56.7% between January 2017 and January 2018 and that is due to the decrease that happened in daily room rates estimated at 8.4%.
It is a known fact that the Kingdom of Bahrain has always been a major tourist attraction to visitors from all corners of the globe and neighbouring countries, in particular, Saudi Arabia where 57% of all visitors to Bahrain are from Saudi Arabia.
However, it is expected that with Saudi Arabia’s 2030 vision and its focus on becoming a tourist destination; Bahrain’s hospitality sector may get affected as a result.
“We see this as an opportunity for further investments by the government in diversifying Bahrain’s leisure offering, and targeting new source markets for tourists,” Faisal Durrani, the head of research at Cluttons, explained.
In the first quarter of 2018, rents across Bahrain’s main residential areas recorded a slip by 2.9%, indicating the stability of the market witnessed all thorough 2017 has finally ended.
However, it is safe to say that residential areas have witnessed a comeback in their rental performance such as Saar and Al Janabiyah, in particular where demand is at its highest thanks to the development of new malls and schools and also the emergence of new villa communities.
And even though 2018 may not be the year of the residential markets, but Bahrain Real Estate Regulatory Authority (RERA) has plans to bolster institutional investor confidence in the market and enhance the kingdom’s attractiveness as a property investment destination.
Cluttons report for the upcoming months indicated that Bahrain’s residential market is expected to remain flat at best in the short term especially that demand still appears to lag supply.
Office rents have remained stable from the beginning of the year, however, it has been noticed that some deals are being concluded below advertised rates; all this indicates a relatively unstable market over the past year.
Cluttons, however, predicts that rents are likely to remain stable and any declines will be unmentionable.