The retail sector in Bahrain continues to thrive with newly delivered and upcoming developments announced in the past year, including destination malls such as The Avenues under construction opposite the Bahrain Bay on Manama Corniche and Seef Mall Muharraq which opened in the first quarter of this year, a report said.

Projects set for delivery later this year include The Courtyard in Seef District and Galleria in Zinj, a Dadabhai project, located on the Sheikh Isa bin Salman Highway offering over 40,000 sq m of gross leasable area (GLA), according to the Q1 2015 Bahrain MarketView by global property consulting firm CBRE.

Steve Mayes, director, Middle East Research, CBRE Bahrain, said: “Despite Bahrain being a small market geographically, demographics and traffic congestion has provided an opportunity for local retail centres and malls to flourish.”

“Retail occupiers including large international groups are now considering the community segment as an important part of their strategy for the kingdom, outside of the obvious destination locations, such as City Centre and Seef Mall.”

Office market

According to the CBRE report, the commercial office market has become fragmented with landlords who have been able to adapt to current market demands, performing better than those who have continued with traditional approaches to leasing space.

“The current surplus stock of commercial office space in and around the CBD (central business district) and further developments in the pipeline has led to a market that firmly favours tenants. There is a clear divide between landlords who have formulated or realigned their offerings to better meet tenant’s requirements,” added Mayes.

Landlords proposing flexibility in their offering, providing smaller, partitioned units as well as traditional space are faring better in terms of occupancy rates and income in this climate, noted the report.

“For Grade A market leading properties, headline rents remain largely unchanged. Grade B and out of town office vacancy rates also continue to gradually increase as businesses take advantage of the opportunity to relocate and lease in premium buildings, with a greater number offering flexible solutions, incentives and fitted sub 150-sq-m units,” said Mayes.

Residential market

According to the report, Bahrain’s residential market has remained buoyant during the first quarter of 2015, albeit without actually recording further rental growth. However, demand continues to be strong with newly completed residential buildings across the capital, and particularly in popular expatriate areas such as Juffair and Seef, achieving high occupancy within relatively short time frames.

“These locations achieved high occupancy within relatively short time frames. Notable success stories include the fourth tower of Dar Al Salam Port, a Bin Faqeeh development, at Reef Island, which was completed this quarter and is currently sitting at approximately 75 per cent occupancy, with a mix of investors occupying the apartments as end users and rental tenants,” said Mayes.

“Spring Hills, Juffair, part of the Royal Ambassador property portfolio, also opened to tenants this year and has already achieved approximately 80 per cent occupancy,” he added.

Hospitality sector

A surge of new projects entering the hospitality market both in the luxury and mid-range segments are providing a boost to Bahrain’s economy. Although the average occupancy reported for hotels, particularly in the five-star bracket is modest, the development in this area shows no sign of slowing.

“This year, The Four Seasons at the heart of Bahrain Bay and the ART Rotana at the Amwaj Islands have both opened their doors in the kingdom, in time for the Formula One race season. Ibis Hotel Sanabis, the first-of-its-kind budget mid-range hotel chain to open in Bahrain has also entered the scene taking advantage of the limited offerings in Bahrain for reasonable, affordable accommodation that meets international standards,” said Mayes.

Light warehousing/industrial

According to the CBRE report, a number of noteworthy deals are set to be signed in the light warehousing/industrial sector imminently and new storage and light industrial facilities are poised to enter the market place. This includes Investment Gateway-Bahrain by Manara Developments; a masterplanned project located in Hidd which will offer light industrial, commercial showroom and low-rise office buildings with ground floor retail.

“Investment Gateway-Bahrain provides opportunities to non-Bahraini companies to purchase industrial and commercial plots encouraging FDI (foreign direct investment) within the kingdom. Initial infrastructure work for the project is set for completion in early 2016 and a majority proportion of plots offered for sale are reportedly sold,” said Mayes.

Pioneering projects including the Bahrain International Investment Park (BIIP) and Bahrain Investment Wharf (BIW) along with Bahrain Logistics Zone (BLZ,) all located in Hidd, continue to experience high demand for leasing of industrial and warehouse units from international occupiers, bringing significant investment into the kingdom, noted the report. – TradeArabia News Service