Bahrain Real Estate Market Review – Q4 2022

BAHRAIN

CBRE report finds that Bahrain ended 2022 with consistent performance across real estate asset classes amidst strong economic growth

On the back of strong GDP growth, high oil prices and new fiscal reforms, Bahrain’s real estate transaction volumes continued to improve throughout the end of 2022, reaching 5,659 transactions in Q4 and ending the year with a total of 21,603. This marks a full-year increase of 0.7% year-on-year compared to 2021, and a jump of 3.2% from Q3.

Office Sector

Looking at Bahrain’s office sector, CBRE data shows that Grade A & B office rental rates stabilised in 2022, at a monthly average of BD5.250 per square metre, having recorded a decline in the previous year. With supply continuing to outpace demand and key pipeline projects becoming operational in the next twelve months, it is anticipated that rental rates will continue to face downward pressure.

Residential Sector

In the residential sector, average quoted apartment rental rates fell marginally in Q4 2022, down 0.4% from the previous quarter. In terms of sales, average rates declined by 1.3% in the fourth quarter, following a brief increase in Q3 2022. Average quoted villa rental rates slightly increased in Q4 2022, with rates increasing by 1.5% from the previous quarter, while quoted sales rates fell by 0.8% over the same period.

Overall, for 2022, villa rental rates averaged BD923 per month across all villa types and governorates in the mid- to high-income market segment. Bahrain has seen the launch of the latest government-led housing programme, which will provide 19,000 affordable housing units at a total value of US$2.65 billion.

The launch of the first phase includes 771 units (both villas and apartments) in Salman Town and Khalifa Town.

Hospitality Sector

Within the hospitality sector, data shows that hotel occupancy in Manama increased by 6.8 percentage points compared to 2021, and one percentage point compared to Q3 2022. Whilst ADRs increased year-onyear by 22.1% compared to 2021, they fell by 1.2% compared to Q3 2022. As a result, RevPARs increased by 41.2% compared to 2021 and 2.4% compared to Q3 2022.

The last quarter of the year saw the opening of Exhibition World Bahrain, a ten-hall exhibition/convention centre with a total area of 95,000m², making it the largest centre of its kind in the region. Built at an approximate cost of US$223.4 million, the launch of the venue forms part of the government’s strategy to diversify the economy, focusing on industries such as MICE, events, entertainment and sport. Q4 also witnessed the return of cruise ships for the first time since the COVID-19 pandemic, bringing more than 11,000 tourists over just three days in December.

MIDDLE EAST