Real estate transactions in Bahrain totaled 9,362 in Q4 2023, according to SLRB data. This marks an increase of 65.4% YOY, and an increase of 82.0% QoQ compared to Q3 2023. Real estate transaction value, however, is reported as being BHD1.07bn, marking a 1.2% decrease on the same period last year.
Looking at Bahrain’s office sector, rental rates remained stable in 2023, with Grade A rents sitting at BHD5.98 per sqm per month on average. Vacancy rates have stabilised and seen a small improvement based on growth in the workforce as well as reduced development and new additions of Grade A properties to the market. There are a number of new office buildings scheduled to open in 2024, including Sayacorp Tower and Seef Boulevard. Should these openings go ahead as scheduled, the total supply of office space in Bahrain will increase by 1.1% in 2024.
In the residential sector, average apartment sales rates across the Kingdom grew by 2.5% from 2022 to 2023. Villa sales rates based on title deed area declined marginally by 0.44% YoY in 2023 overall. In the rental market, mid- to high-end quoted apartment rates fell by 1.7% in the year to Q4 2023. Over the same period, mid- to high-end villa rates remained relatively stable, witnessing only a marginal 0.1% decline.
Within the hospitality sector, key performance indicators demonstrated improvement in 2023. STR Global’s data shows that average hotel occupancy in Manama was up by 5.1% compared to 2022. Over this period, although Manama’s ADR fell by 2.7% to an average of BHD61.0, its RevPAR increased by 1.9%. Bahrain as a whole performed similarly, with its occupancy rate increasing by 4.4% and ADRs falling by 2.2%, resulting in RevPARs increasing by 2.1%. December saw the opening of Bahrain’s first Raffles property. The converted property, previously Al Areen Palace & Spa, offers 78 private pool villas ranging from one to three bedrooms plus five F&B outlets.
In the retail sector, CBRE’s biannual retail occupancy survey for H2 2023 showed marginal growth for the third consecutive period. H2 saw the average occupancy increase by 1.0 percentage point across CBRE’s set of 20 tracked malls in Bahrain. Average tracked rental rates declined by over 4% in 2023 and we anticipate that the increasing supply, across all segments from neighbourhood plazas to destination malls, will increase pressure on landlords to provide more competitive commercial terms in the coming period.
Heather Longden, Director – Advisory & Transactions, at CBRE in Bahrain comments: “It is encouraging to see the increase in volume of transactions for 2023, despite the decline in total value. While performance is generally muted across sectors, the residential apartment segment has seen an uptick in average sales rates achieved for 2023, which is indicative of the quality of supply that continues to be developed. Hotel performance has shown signs of further recovery with increased occupancy rates. We anticipate a challenging time ahead for the office and retail sectors, however, there will be opportunity for landlords providing quality product and service, with competitive commercial terms to outperform.”
