Cavendish Maxwell, a leading property consultancy and chartered surveying firm in the Middle East, released its 2020 Bahrain Property Market Report, comprising key property data and trends for the country’s real estate industry. The report was compiled by the firm’s in-house strategic consulting and research team, and covers key data and overviews into the residential, retail, office, industrial and hospitality sectors.
Commenting on the report, Aditi Gouri, head of strategic consulting and research at Cavendish Maxwell said, “In what has been a challenging year, Bahrain has suffered a dual blow from weak oil prices and the restrictions brought on by the COVID-19 pandemic. However, the kingdom has been quick to respond and has done so efficiently, announcing relief measures to help individuals and businesses tide over the health crisis and continue on the path to recovery. Further, the successful hosting of events such as the Formula 1 Grand Prix recently is testament to the resilience of the island economy which has tourism and entertainment at the heart of its diversification strategy.”
Rashed Aljowder, head of business development – Bahrain and KSA Eastern Province said, “The release of this report comes at a time of great pride for the Kingdom of Bahrain, with the people not only celebrating National Day this week but also basking in the international limelight of successfully and safely hosting two Grand Prix events on successive weekends while maintaining stability in the rate of new COVID-19 cases. After being postponed earlier this year, the two races were organised with the same dedication despite restricting the audience numbers, a commendable quality that is helping Bahrain recover from the global pandemic. The efforts were also lauded by HRH the Crown Prince and Prime Minister who expressed that the success of the events is a tribute to the preparation and commitment of Bahrainis and their determination to rise to challenges and secure achievements in line with the vision of HM the King.”
Key market insights of the 2020 Bahrain Property Market Report
Mining, financial services and manufacturing were the top three contributors to GDP growth in 2019. Between 2010 and 2019, Bahrain’s GDP increased from BHD 9.7 billion to BHD 14.5 billion at current prices, registering a compound annual growth rate (CAGR) of 4.6%. At constant prices, GDP grew from BHD 9.7 billion to BHD 12.9 billion with a CAGR of 3.2%.
Similar to other global economies, Bahrain will witness a contraction in economic growth in 2020, with a rebound expected in 2021. Measures introduced by the Bahrain government to mitigate the impact of the pandemic, including a BHD 4.3 billion economic stimulus package, are expected to benefit various sectors, particularly small and medium enterprises (SMEs) and the private sector.
Despite the volatility in oil prices and ongoing fiscal consolidation, Bahrain has continued to develop infrastructure projects with BHD 221.7 million in new tenders in H1 2020. Bahrain continues to deliver on its infrastructure plans and has approved a number of major projects.
In general, oversupply continues to govern residential property prices and rents in Bahrain. Higher vacancy rates coupled with the completion of projects under construction are factors increasingly pressuring landlords to attract tenants.
The trend of subdued market conditions in the office sector has extended into 2020, primarily due to an oversupply of commercial spaces amidst a protracted economic slowdown. However, certain pockets have displayed signs of recovery with rents either holding steady or declining at a slower pace. Occupancy levels are improving, albeit slightly.
Data from STR Global showed that in Q3 2019 in Manama, hotel occupancy grew 3.8% to 55.5%, ADR rose 0.2% to BHD 58.6 and RevPAR increased 4.1% to BHD 32.5 compared to the year ago. The absolute occupancy level was the highest for a third quarter in the capital since 2010.
Authorities are preparing for a resurgence when safety is restored with a slew of digital campaigns to promote tourism post COVID-19. A number of hotel launches and renovations have also been planned to accommodate visitors.
Despite being oversupplied, a number of major retail projects have either been announced or delivered recently and total approximately 300,000 sq m of combined gross leasable area. These establishments have been designed keeping in mind the need to align with the rising popularity of e-commerce versus traditional retail. As tourism continues to drive retail in Bahrain, the sector will naturally face headwinds whilst travel remains restricted due to COVID-19 and until normal activity resumes.
To read the full report, download your copy from the link here: https://go.cavendishmaxwell.com/e/869201/2LDwyS2/crbnnt/269146138?h=MHsDou7AsTh42nGosfzW_kbAsEXDp0VEj7QhuBt9Nww