Bahrain's real estate transactions up 7.1pc in Q2
MANAMA, August 15, 2023
Bahrain's real estate transactions continue to grow amid moderate performance across key sectors including residential, office, retail and hospitality, according to global real estate consultancy firm CBRE.
Real estate transactions in Bahrain totalled 5,279 in Q2 2023, according to SLRB data. This marks an increase of 7.1% year-on-year, but a decrease of 16.7% compared to last quarter, which is likely due to Ramadan and both Eid holidays falling during Q2, it stated.
Looking at Bahrain’s residential sector, average quoted apartment rents increased by 2.1% in Q2 across governorates compared to Q1, while quoted apartment sales rates fell by 1.1%.
The highest rates continue to be seen in the Capital Governorate, although the Muharraq Governorate is beginning to close the gap, with newly delivered quality assets achieving higher rates in the likes of Diyar Al Muharraq and Dilmunia, stated CBRE in its Bahrain Real Estate Market Review Q2 2023.
In terms of villas, there were marginal changes in rates in Q2, with quoted rents falling by 1% and sales increasing by 0.6% compared to Q1.
Meanwhile, sales rates stayed relatively constant on an annual basis compared to Q2 2022, with apartments remaining unchanged and villa rates softening by 0.2%. Looking at rents, rates continued to trend upwards year-on-year, with apartment rents increasing 4.6% and villa rents by 7.3% in the year to Q2 2023, it added.
On the office sector, CBRE said it has witnessed an uptick in registered leases in its managed properties for the six-month period ended June 30, 2023.
The Grade A & B commercial office market continues to serve two main demand drivers: government and quasi-government entities seeking larger floor plates, and international firms requiring small-to-medium-sized units.
While rental rates remain relatively stable, vacancy rates have begun to fall for the first time in recent years, reaching their lowest rate since 2019, now estimated to be standing at 26.3%, said the statement.
There is however a significant pipeline of supply due to be introduced to the market in H2 2023 and into next year, which will likely impact the headline rate, particularly amid current occupier demand trends, it added.
In the retail sector, CBRE Bahrain’s biannual retail occupancy survey recorded increases in the majority of the surveyed set of malls in H1 2023.
Of the 20 malls surveyed, 70% recorded occupancy growth, with the most notable seen at Dana Mall in the Capital, which benefited from recent store openings and the launch of Epix Cinemas. Average occupancy across the set increased 3.6 percentage points compared to H2 2022, now sitting at 70%. The highest occupancy rates have been recorded at Dragon City, the Avenues, and City Centre.
While the current occupancy level is at its highest level since the onset of the COVID-19 pandemic, the average occupancy rate still sits some 10 percentage points below its 2019 levels. Despite the gradual upward trend in average occupancy, average rental rates have seen a 4.0% decline across all retail categories in the year June 2023.
This has largely been the result of surplus retail stock across Bahrain. We are seeing development activity continue across all market segments, including super-regional, regional, community and neighbourhood retail. This additional pipeline of supply is anticipated to further dilute the market, placing additional pressure on achievable rental levels.
Heather Longden, Director - Advisory & Transactions, at CBRE in Bahrain said: "CBRE has recorded an uptick in registered leases within our managed office properties and a minor reduction in vacancy rates to 26.3%."
"All key performance indicators in the hospitality sector have shown signs of improvement year-on-year and according to the BTEA, Bahrain International Airport welcomed 4,098,582 passengers during the first six months of 2023, up 43.2% from the same period in 2022, " stated Longden.
"While retail occupancy rates have improved marginally to reach 70%, average rental rates have dropped in the first half of 2023 as supply of shopping centre space continues to grow," he added.-TradeArabia News Service