Bahrain's residential market posts marginal growth in Q3
MANAMA, December 7, 2023
The hospitality and residential markets in Bahrain have recorded marginal uplifts during the third quarter while other sectors remained stagnant, according to real estate expert CBRE.
The real estate transactions in the kingdom totalled 5,145, down marginally by 2.5% from a quarter earlier. However, when comparing the volume of transactions in the year to date, there is an increase of 5.1% in the first 9 months of 2023, compared with the same period in 2022, stated CBRE in its Bahrain Real Estate Market Review Q3 2023.
Looking at Bahrain’s residential sector, the quoted residential rates performance was mixed in Q3 2023. When compared to Q3 2022, all but quoted apartment sales, which fell by 1.7%, increased.
Apartment rents increased by 3.2%, while villa rents and sales increased by 4.3% and 1.2% respectively. Looking at quarter-on-quarter change, rental rates fell marginally across both apartments and villas, while sales rates grew, compared to Q2 2023, stated the report.
In the mid-to-high-end segment, apartment rents fell by 2.5% quarter on quarter, while villa rents fell by 0.3%. In terms of sales, apartment and villa rates grew by 1.0% and 3.9% quarter-on-quarter respectively.
In September, Eagle Hills completed construction of Marassi Park, a 249-unit, luxury residential development in Marassi Al Bahrain on Diyar Al Muharraq, ready for handover during Q4 2023. The property, which is the fifth project to be delivered in the development, has 25,500sqm GFA, sea views, and is within a short walk of both Marassi Beach and the yet-to-open Marassi Galleria shopping mall.
On the office sector, CBRE said the average rents have remained constant in the Grade A category overall in the year to Q3 2023, as supply growth is not being met with the required demand from local or international occupiers and vacancy rates remain relatively high.
Taking a regional view, office rents in the UAE and Saudi Arabia have seen significant increases in the Grade A category, where in the year to Q3 2023 the average rental increase was recorded as 11.4% for all surveyed cities. Bahrain currently has some of the lowest office occupancy costs in the region. It is anticipated that with new stock coming on stream in 2024 and 2025, average rental rates and occupancy are likely to be impacted although we expect the flight to quality to continue.
This is driven by office occupiers in lower grade space taking advantage of affordable commercial terms for Grade A space. We are continuing to witness development in the flexible office sub-segment in Bahrain, including the opening of a new co-working space during Q3 2023.
HQ, located in Seef Mall, comprises 1,085sqm of varying workplace solutions, including hot desks, offices and event spaces, as well as Commercial Registration (CR) options, which is mandatory to set up a business in Bahrain.
Bahrain’s retail market continues to witness development of new stock within both the destination mall and neighbourhood plaza categories. Marassi Mall is now due to open in February 2024, which will introduce approximately 116,000 square metres of GLA.
The Avenues Phase 2, which will add circa 40,000 square metres, is also set to complete next year. During Q3 2023, a number of new announcements were made, including Edamah’s renovation of Reef Mall in Malkiya, the launch of TimeOut Market at Bahrain City Centre, due to open in 2024, and the news of Lulu Hypermarkets to be opened in a variety of locations, including the Avenues, Manama Centre, and Diyar Al Muharraq.
While there are concerns over the significant pipeline supply and the impact on rental rates, take up of space in key new projects and growth in consumer spending provide a more optimistic view.
Heather Longden, Director - Advisory & Transactions, at CBRE in Bahrain, pointed out that it had seen slight uplifts in Bahrain’s hospitality and residential sectors in Q3.
"In the residential market, although performance was mixed and quoted apartment sales rates dropped marginally year-on-on year, average quoted residential rents increased along with villa sales rates across the geographies," he added.-TradeArabia News Service