Bahrain’s real estate market experienced a slight cooling in 2024, with a marginal dip in transaction volumes and values, according to CBRE Middle East’s latest market review.

Despite this, the third Cityscape Bahrain event injected some positive momentum, showcasing over 50 projects and attracting over 10,000 visitors, with BD341 million in deals reportedly agreed.

Total real estate transactions registered in 2024 reached 24,863, a 4.8 per cent decrease year-on-year. The total value of transactions also saw a minor decline, reaching BD1.056 billion, compared to BD1.074bn in 2023 and BD1.087bn in 2022.

The second half of 2024 witnessed subdued performance across various sectors. However, Cityscape Bahrain, held in November, provided a significant boost, with numerous new projects announced, potentially counteracting the overall market softening.

The residential sector presented a mixed picture. Average sales rates for apartments dipped 1.6pc in the second half of 2024 compared to the previous year, while villa sales rates saw a slight 1.8pc increase.

A growing trend in the residential market is the increasing focus on sustainability, with developers incorporating eco-friendly features to attract buyers and renters concerned about utility costs. Initiatives such as deep gravity sewage systems and solar-powered irrigation are becoming more common.

The retail sector remained relatively stable, with average occupancy rates across tracked retail centres decreasing by only 0.15pc. Destination malls maintained the highest occupancy. The trend towards entertainment-based experiences in retail properties continues, as retailers seek to combat increased competition and limited consumer spending.

The retail sector saw a 12.7pc supply growth in 2024 across all shopping centre categories. Average rental rates remained flat from the first to the second half of 2024, following a 4.2pc decline from the previous year. 

Bahrain’s office market experienced slight declines in average rental rates during the second half of 2024, with Grade A and B offices averaging BD5.1 per square metre per month. Continued growth in supply, coupled with subdued demand, is putting pressure on rental rates and occupancy. However, new, high-quality office stock, meeting international standards, continues to enter the market.

The hospitality sector saw positive growth, with a 7.3pc year-on-year increase in passengers at Bahrain International Airport, reaching 9.4m in 2024. The number of 5-star hotel room keys increased by 9.5pc from 2023 to 2024, with a further 4.4pc growth expected in 2025.

CBRE Bahrain director for advisory and transactions Heather Longden commented on the office market challenges, noting the pressure on rental rates due to increasing supply and stagnant occupancy.

She emphasised the importance of providing modern, high-quality office solutions to meet evolving occupier expectations.

Highlighting the mixed performance of the residential sector, CBRE Bahrain senior analyst for strategic advisory Samantha Schiffman noted that villas outperformed apartments in sales rates.

She explained that demand for villas is primarily driven by local residents, while apartments are often seen as investment properties targeting expatriate tenants.

Copyright 2022 Al Hilal Publishing and Marketing Group Provided by SyndiGate Media Inc. (Syndigate.info).