Press Release

CBRE Releases its Bahrain Real Estate Market Review Q1 2022

Bahrain’s real estate transactional activity shows gradual improvement at the start of the year, according to research by CBRE.

May 22, 2022

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Bahrain's real estate transactional activity shows gradual improvement at the start of the year, says CBRE 

Manama – 22 May, 2022 – Real estate market transactional activity in Bahrain has continued to show gradual improvement since the beginning of the year, as pandemic restrictions are lifted. 

Looking at Bahrain’s office sector figures, visitation to workplaces exceeded its pre-pandemic baseline and climbed to 4.8% in March. Average rental rates across Grade A and B space remained stable in Q1 2022, as compared with Q4 2021, at BD5.25 per sqm per month, although transactional activity in the sector has been muted through the start of the year. 

In Q1 2022, tracked quoted apartment sales rates increased by 2.3% compared to 2021, reflecting the first positive rate variation in recent years. Average quoted apartment sales rates sat at BD878 per square metre for two-bedroom mid-to-high end properties across Bahrain, compared to BD831 in 2021. It should be noted that recently launched prime properties, including within Diyar Al Muharraq, have driven up average quoted sales rates. Average mid-to-high end apartment rental prices in Bahrain continued to decline between Q4 and Q1, falling by up to 12% QoQ for two-bedroom apartments, with the lowest change seen in three-bedroom apartments configurations. There continues to be growth in supply of apartment product across the Kingdom, and with subdued population growth it is anticipated that there will be further downward pressure on rents.

Bahrain’s retail and recreation sector visitation witnessed a dip at the start of Q1 2022 compared to Q4 2021. Limited retail activity is expected at the beginning of a new calendar year, with this period also seeing a surge in Covid-19 cases. Since March, we have seen the number of positive cases fall across the Kingdom. Branded retail occupiers, particularly in the fast food and convenience segments, are continuing to pursue expansion strategies. Drive-thru concepts remain popular to meet the expectations of customers. Successful neighbourhood and community developments are demonstrating the case for a balanced tenant mix that offers retail, F&B and community services.

In terms of occupancy within the hospitality sector, there was minimal change in the year to March 2022 versus 2021, at an increase of 3.5% percentage points. Over the same period, ADR and RevPAR increased at rates of 41.6% and 83.6% respectively. Despite this, occupancy remains over 9 percentage points lower than the pre-pandemic levels, with RevPAR over 11.4% lower than Q1 2019. ADR has witnessed a positive increase of over 5.4%; however, this can mostly be attributed to inflation. Globally, the total number of daily commercial flights has continued to increase, with an uptick of 33% in Q1 2022 compared to the same period in 2021. However, the figure remains markedly below pre-pandemic levels, with an average of 17,000 fewer flights per day in Q1 2022 compared to Q1 2019.

"We have recorded occupier demand for greater incentives in acquiring new workspace, such as extended rent-free periods, although leading landmark properties are maintaining headline rents overall."
Heather Longden, Director - Advisory and Transactions at CBRE Bahrain 

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