The current pipeline of projects should lead to a 15.9 percent increase in the total number of apartments in 2023.

Real estate transactions in Bahrain totalled 6,336 in Q1 2023, according to the latest data by the Survey and Land Registration Bureau (SLRB), showing a 14.5 percent year on year increase, as well as a 12 percent quarter on quarter increase.

The trading value, however, is reported as being BD243,144,972 ($645,019,358 approximately), showing a 17 percent decrease on the same period last year.

Bahrain kicked off 2023 with an increase in recorded transactions from the same period in 2022. CBRE has noted an uptick in commercial office enquiries, both in the number of requirements and the amount of space sought by organisations which should have a positive impact on the occupancy rates, particularly in quality buildings that meet the modern occupier expectations

Heather Longden

Stability and growth in Bahrain’s office sector

In Bahrain’s office sector, the total tracked supply of office stock in the first quarter this year recorded 1.36 million square metres across all grades.

When compared to the same period last year, the average rental rates recorded in the first quarter this year “has remained stable,” a statement by CBRE said, adding the stability was at BD5.25 ($13.93) per square metre, per month.

CBRE also said a 2.5 percent in total supply is expected over the next 12 months, if all planned projects are completed as scheduled.

Most of the development activity will be centred in Bahrain Bay, Bahrain Financial Harbour and Seef District.

“Bahrain kicked off 2023 with an increase in recorded transactions from the same period in 2022. CBRE has noted an uptick in commercial office enquiries, both in the number of requirements and the amount of space sought by organisations which should have a positive impact on the occupancy rates, particularly in quality buildings that meet the modern occupier expectations,” Heather Longden, Director – Advisory & Transactions, at CBRE in Bahrain said.

Growth and expansion in the kingdom’s residential sector

As for the residential sector, both average quoted apartment sales and rental rates increased by 3.6 percent and 2.3 percent respectively from the fourth quarter in 2022 to the first quarter in 2023.

Apartment rental rates rose 1.7 percent, while sales fell “marginally” by 2.7 percent, the statement said, compared to the same period last year.

However, the current pipeline of projects should lead to a 15.9 percent increase in the total number of apartments in 2023, CBRE said, adding that the new units will mainly be located in the Capital, as well as the Muharraq Governorate.

Record-breaking hospitality sector performance

The hospitality sector, which hosted Formula 1’s 2023 season opening Grand Prix in March this year, saw record-breaking numbers in terms of crossings in a single day, number of visitors and airport traffic.

“The event recorded its highest attendance in its 19-year history, with 36,000 visitors on the main race day and 99,500 over the full weekend. In addition, the King Fahd Causeway witnessed a record-breaking number of crossings in a single day, with 136,498 passengers travelling across from Saudi Arabia,” the statement said.

In addition, the Bahrain International Airport welcomed about seven million passengers in 2022, signifying a 127.5 percent jump in airport traffic compared to 2021.

Hotel occupancy in Manama experienced a year-on-year increase of 6.0 percentage points and a quarter-on-quarter increase of 4.6 percentage points up to March 2023.

“The hospitality sector experienced a boost in Q1 2023, with improvement across all key performance indicators during the Grand Prix period. The retail sector has remained stable in terms of rents, however with significant pipeline supply increasing GLA per capita in 2023 – 2024, we would anticipate further pressure on achievable rates and overall absorption,” Longden said.

Average Daily Rates (ADRs) also showed similar growth rates, rising by 6.6 percent year-on-year and 6.2 percent quarter-on-quarter.

Additionally, Revenue per Available Room (RevPAR) increased by 19.6 percent compared to the same period in 2022 and 16.1 percent compared to the fourth quarter.

Growth and anticipation in the retail sector

Moving on to the retail sector, the Gross Leasable Area (GLA) of super regional and regional malls in Bahrain reached approximately 927,000 square meters in the first quarter of 2023.

The retail sector in Bahrain continues to progress, with the anticipated opening of destination malls in 2023 and 2024, such as The Avenues Phase 2 in the Capital and Marassi Galleria in Diyar Al Muharraq.

The latter will add around 116,000 square meters of GLA, significantly increasing the Muharraq Governorate’s share of total retail space from 19 percent to 30 percent.

Rental rates remained stable in the first quarter of 2023 compared to the previous quarter. However, CBRE is closely monitoring this trend as new retail developments enter the market, which could potentially impact average rents and occupancy rates.

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