Dubai, UAE: Capital values across the residential real estate segment have remained largely stable across Bahrain on a quarterly basis, according to Savills Q1 2022 Bahrain Market in Minutes report. However, when compared annually, the capital value index for apartments and villas dropped by an average 1.2% and 2.6%, respectively.
Demand for rental properties across villas and townhouses has remained strong across Bahrain during Q1 2022. This led to a marginal rental price increase of 1.5% to 2.0% y-o-y across the high-end and the low-end segment. Rents across apartments on the other hand have largely remained stable on a quarterly basis.
A revival in economic activity followed by a strong push from the government and a general improvement in market sentiment has led to an increase in demand for office space across the city, consequently leading to an increase in asset pricing, according to the report.
The stability that was witnessed in the office rental market in 2021 extended into the first quarter of this year supported by the low-end segment, recording a 1.6% y-o-y price increase. However, the mid-end sector’s price correction has sustained, with the y-o-y rental price decreasing 5.5%.
Hashim Kadhem, head of professional services, Savills Bahrain said, “We have noted an increase in inquiries from prospective tenants in relation to the Environmental Social and Governance (ESG) credentials of current office stock with higher interest for those possessing sustainability accreditations. Given the demand-supply imbalance in the market, developments which incorporate these demands will claim a larger share of the market going forward.”
The recovery also continues in the retail and tourism space. The number of mall visitors rose by 26.9% y-o-y in Q1 2022 while the volume of commercial licenses issued increased by 35.4% y-o-y. On the back of Formula 1 Gulf Air Bahrain Grand Prix 2022, international tourist arrivals increased by 50% in Q1 compared with the same period in 2019.
Speaking on the outlook for the industrial and logistics sector, Swapnil Pillai, Associate Director Research, Middle East said, “Bahrain has launched the fastest Global Sea-to-Air Logistics Hub in the region with only a 2-hour turnaround time for all containers. This means that products can reach customers in half the time it took earlier and at 40% of the cost. This move is likely to significantly improve Bahrain’s position as a hub for logistics activity in the future.”
Savills plc is a global real estate services provider listed on the London Stock Exchange. With a presence in the Middle East for over 40 years, Savills offers an extensive range of specialist advisory, management and transactional services across the United Arab Emirates, Oman, Bahrain, Egypt and Saudi Arabia. Expertise includes property management, residential and commercial agency services, property and business assets valuation, and investment and development advisory. Originally founded in the UK in 1855, Savills has an international network of over 600 offices and associates employing 39,000 people across the Americas, UK, Europe, Asia Pacific, Africa and the Middle East.