Authorities are preparing for a resurgence when safety is restored with a slew of digital campaigns to promote tourism post COVID-19.
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.”
KEY MARKET INSIGHTS FROM CAVENDISH MAXWELL'S 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%.
- 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.
- 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.