Rents in Manama's luxury property sector have fallen by 20 per cent, plunging five times more than Dubai, according to a global report.

The country recorded the biggest decline in prices among 16 key cities surveyed in the Knight Frank Prime Global Letting Index published yesterday (June 27).

Rents in Dubai, the only other Gulf country included in the study, dropped by 3.9 per cent between March last year and this year, the report said.

Overall luxury rents in the Middle East declined by 5.4 per cent during the same period, says the report.

It stated rents would continue to fall this year, but predicted Bahrain's would decline less than 5 per cent.

'The subdued performance in the first quarter of this year conceals the large variation in city performance,' it says.

Billed as the definitive means for investors and developers to monitor and compare the performance of prime rental markets across key global cities, the study aimed to establish the effect the global economic downturn had on corporate market activity.

It is compiled on a quarterly basis by Knight Frank using data from the independent company's network of global offices and research teams.

The study said the outlook for prime rents hinged on the health of the global economy, but with economic forecasts being revised downwards, the prospects looked poor with only limited growth likely for the rest of the year.

However, the report said letting agents remained upbeat about the direction of prime rental markets.

'Eight of the 11 cities included in our survey are expected to see prime rents remain the same or rise in the remainder of 2012 and most felt that activity would increase in the coming two to three years,' it said.

The report stated the positive outlook was compounded by recent research undertaken by PricewaterhouseCoopers which, aside from suggesting international assignments were on the increase, also indicated people now view overseas assignments as a rite of passage, with 80 per cent of those surveyed wanting to work abroad during the course of their career.

'Cross-border opportunities are likely to become more flexible in nature and possibly a prerequisite for promotion,' it added. – TradeArabia News Service