Bahrain remains unfazed by the current challenging economic climate, pressing on with key infrastructure projects, indicates the Q4 2016 Bahrain MarketView by CBRE.
In retail, particularly, development activity in regional, sub-regional and neighbourhood segments continues to grow in the Kingdom. Rental rates at sub-regional shopping malls average BD28 per sqm per month for in-line stores and in the range of BD12 per sqm per month for neighbourhood shopping centres.
“At the forefront of retail development is The Avenues, an Alshaya Group-led project, at Bahrain Bay Corniche, scheduled to open partly in late 2017. The development is expected to provide 409,028 sqft of total leasable retail space and an impressive range of facilities,” observes Heather Longden, associate director, CBRE Bahrain.
The hospitality sector also continues to see growth. The 2015 announcement of the influx of four-star and five-star hotels continued to trend in 2016, with a number hotels and branded residences planned to open in 2017. There are currently 111 hotels operating in Bahrain, with the most recent opening being the Downtown Rotana. However, this figure is set to rise, with the Wyndham Grand at Bahrain Bay and the Marriott Residence Inn at Water Garden City planned to open in 2017 along with The One & Only Resort.
“The positive development in Bahrain has raised concerns over whether demand will be able to absorb the increase in stock, however, information released by Bahrain’s Economic Development Board paints a positive picture, with a rise in visitor numbers to more than 12.2 million people in 2016, up by 6% from 2015 and the overall hospitality sector growing by 7.3% annually in 2016,” says James Lynn, director, CBRE Bahrain.
In the residential sector, take-up rates, occupancy levels, rental and sales rates remain stable with the majority of the residential use of smaller and larger projects being a popular choice for developers in Bahrain. According to the Q4 2016 MarketView, Juffair and Amwaj Islands and Seef District, opposite the City Centre Mall, also continue to be popular as personal investment choices, particularly for GCC nationals.
The office market favours commercial occupiers, with attractive rental rates and incentives for businesses looking to invest in the Kingdom. The commercial office market is currently facing a competitive landscape, segmented between landlords offering traditional space and those offering flexible affordable fitted/furnished solutions.
Key developments across the Grade A segments, such as Bahrain World Trade Centre, Bahrain Financial Harbour and the anticipated pre-leasing stage of the United Tower at Bahrain Bay, are all due to open in H2 2017. These will provide highly competitive rental rates and incentives, such as extended rent free and contribution to fit out works in order to attract tenants.