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Bahrain Real Estate Market Review Q4 2023

In 2023, Bahrain witnessed an uptick in real estate transaction volume, though the total value recorded a slight decline.

March 7, 2024 8 Minute Read

Bahrain Q4 2023 Report Image

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Key takeaways

  • There were 9,362 total real estate transactions in Bahrain in Q4 2023, an increase of 65.4% YoY compared to Q4 2022 and an increase of 82.0% QoQ compared to Q3 2023. This brought the total transactions for 2023 to 26,121, an increase of 20.9% and over 4,500 additional transactions compared to 2022. Real estate transaction value, however, fell marginally by 1.2% YoY, from BHD1.09bn to BHD1.07bn.
  • In the residential rental market, mid- to high-end quoted apartment rates fell by 1.7% on average YoY from 2022 to 2023, while mid- to high-end villa rates remained relatively stable with a 0.1% decline. , reflecting all tracked locations and unit sizes.
  • Office rental rates remained stable across the board in 2023, with Grade A rents sitting at BD5.98 per sqm per month on average, while vacancy rates stabilised amid subdued development in the Grade A office segment.
  • Hospitality KPIs showed improvement in 2023. STR data shows that average hotel occupancy in Manama was up by 5.1% compared to 2022. Meanwhile, in 2023 RevPARs were up 1.9% compared to 2022; however, ADRs have fallen -2.7% to an average rate of BHD61.0.
  • CBRE’s biannual retail occupancy survey for H2 2023 showed marginal growth for the third consecutive period. H2 saw average occupancy increase by 1.0 percentage point across CBRE’s set of 20 tracked malls in Bahrain. Of these properties, eleven saw higher trading occupancy, while six properties saw lower occupancy and three remained the same, compared to H1 2023.

 

It is encouraging to see the increase in volume of transactions for 2023, despite the decline in total value. While performance is generally muted across sectors, the residential apartment segment has seen an uptick in average sales rates achieved for 2023, which is indicative of the quality of supply that continues to be developed. Hotel performance has shown signs of further recovery with increased occupancy rates. We anticipate a challenging time ahead for the office and retail sectors, however, there will be opportunity for landlords providing quality product and service, with competitive commercial terms to outperform.