With the Bahraini government continuing its focus on economic diversification (much like its GCC neighbors), Bahrain’s real estate is expected to benefit from government and landlord-led developments and initiatives.
In a recent report on Bahrain’s real estate, CBRE outlined a number of such efforts that are expected to support the recovery of the wider real estate market in the country.
HERE ARE THE LATEST TRENDS IN BAHRAIN'S REAL ESTATE
RESIDENTIAL SECTOR
While affordable and social housing segments largely drive demand in Bahrain’s real estate, the millennial demographic is likely to benefit from a government backed loan scheme, Mazaya. The loan scheme enables them to purchase their first homes.
On the developers end, rent-to-own schemes, attractive payment plans and guaranteed returns, are popular in what remains to be a tenant-led market.
Meanwhile, regulations concerning staff accommodation and space per person are being reviewed, and several sites may be expected to upgrade their accommodation conditions.
OFFICES
Demand for office space in Bahrain’s real estate is up, with 60% of respondents in the CBRE survey saying that they preferred physical offices. Key government initiatives are being announced across the country to support and encourage innovation and technology, as demand from local tech and fintech startups rises.
At the same time, with an increase in second generation space over the last 12-18 months, rental performance will continue to be pressured amidst supply increases and limited demand.
RETAIL SECTOR
The report noted that landlords have “supported” tenants during the pandemic restrictions through efforts such as flexible lease terms, and flexible/convertible/open spaces for greater retailer interest.
Meanwhile, omnichannel retail is here to stay, although the physical retail experience will very much be a critical part of this. Further, drive-thrus and plazas remain especially popular within the retail real segment of Bahrain’s real estate.
HOSPITALITY
Occupancy has largely been driven by domestic tourism, staycations, and quarantine requirements. Pre-pandemic pressures on this sector are also likely to continue, calling for a “cohesive strategy that connects destinations, attractions and accommodation,” the report said.
Niche opportunities for affordable, family-friendly and quality, 3 and 4-star properties accommodation, are gaining traction. Further, government efforts to improve beachfronts are also underway.
INDUSTRIAL AND LOGISTICS SECTOR
With booming ecommerce adoption, demand for warehousing is expected to continue growing within and outside of formal industrial and logistics parks. Further, a shift away from underperforming traditional asset types is also expected to spark investor interest in this sector.
Leasing of international grade logistics warehouses is especially popular by demand, while secondary grade assets will face pressure as occupiers move towards more “sophisticated” offerings.
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