Bahrain is continuing to witness growth in development and investment in the retail sector, according to new data released by global real estate consultancy firm CBRE. Total retail stock in the regional and super regional mall category in Bahrain stood at 860,700 sqm of gross leasable area (GLA) in Q1 of 2019. With six projects currently under construction and planned for completion in 2022, the delivery is set to increase supply by 34 per cent, further positioning the country as a regional retail destination.
The Bahrain Retail Q1 Snapshot report revealed these future projects will be consistently larger in scale than existing comparables. In 2019, only four per cent of supply have a GLA of between 80,000 and 120,000 sqm, while 33 per cent of pipeline stock is expected to fall into this range.
James Lynn, Director, Strategic Advisory at CBRE Bahrain, commented: “Retail remains one of Bahrain’s most dynamic sectors, and despite a relatively small population, the Kingdom attracts a growing number of tourists. The launch of the Bahrain Shopping Festival ‘Shop Bahrain’ five years ago demonstrated that the retail sector is an important sub-sector in the Kingdom.”
The success of larger shopping malls, such as The Avenues, is testament to the demand for larger scale retail complexes with a leisure and entertainment focus. The popularity of open retail plazas is also gaining traction, with 21 projects under this classification and another 17 in the planning and construction phase.
The report also shows that average rental rates for in-line units have been stable since 2015, achieving BD15.300 per sqm in 2019, down by one per cent year-on-year. Occupancy levels in Bahrain’s shopping malls currently stand at an average of 78 per cent across all properties.
“The retail supply due to come online is anticapted to exert some downward pressue on rents over the next 12 to 18 months. That said, overall stable retail rents and positive government interventions have ignited developer confidence and incentivised investors to do business in the Kingdom,” James Lynn, CBRE concluded.