Bahrain property sector picks up pace in Q2
Bahrain’s residential market witnessed an increased level of activity with a number of new developments being announced in the second quarter of the year, said a report.
As part of the surge in housing and infrastructure projects initiated by the Government during Q2 2013, the Housing Minister announced that around $8 billion will be spent on housing projects by 2017, according to the latest MarketView by CBRE, a leading international real estate consultancy.
The government has built over 100,000 housing units over the past 50 years but with rapid population growth and constraints on the amount of available serviced land, the waiting list now stands at well over 50,000 units.
“Durrat Marina, located just north of Durrat Al Bahrain, signed a memorandum of understanding for the sale and marketing of the first phase of development which includes a residential area, comprising villas and apartments, a ‘festival’ retail area and marina,” said Mike Williams, Head of Research & Consultancy, CBRE Middle East.
“The second phase of Wahat Al Muharraq, a 227-villa housing project was also announced in Q2 2013, the first offering of 32 units at the Seavilla project on the reclaimed Dilmunia Island was released and successfully sold. A new 128 villa project at Durrat Al Areen, the BD20 million Oryx Hills housing project which is part of the Al Areen master planned community was restarted, and the foundation stone for a 4,500 unit government housing unit scheme was laid,” he added.
There remains little activity in the prime office market, which is now spread across the northern part of Bahrain, in Seef District, Diplomatic Area, and Bahrain Financial Harbour. Rental rates remain subdued with new business mainly restricted to consolidation/rationalisation activity in previously used spaces that offer fitted-out accommodation, the report said.
Vacancy rates vary widely as do rental rates with tenants now able to dictate terms. There is only marginal downward movement for the renewal of leases held by those who have already undertaken expensive fit-out programmes but new tenancies are being (relatively) hard fought over although most landlords appear now to have reached their bottom price and suite of incentives.
In the investment sector, the realisation that the market has ‘bottomed out’ seems finally to have stimulated the thoughts of those investors who have been waiting for several years for a ‘bargain’, highlighted the CBRE report.
The reality that rents and therefore values/prices are more likely to rise over the next few years rather than fall further, has prompted renewed enquiries for the better, prime commercial properties.
According to CBRE, properties with existing, quality tenants on long leases, with good management and in prime locations are now being actively considered with several deals on the verge of completion after a long period of dormancy in the investment market.
The hospitality sector saw the announcement of a raft of new hotel projects in Q2 2013. Kuwait Finance House announced that it would be financing the completion of the stalled Banader Rotana Hotel project, a 28-storey, five-star hotel and furnished apartments property offering 251 rooms, while Hilton Worldwide announced its intention to open a 350 room, five-star Double Tree Suites in Juffair in late 2015.
Nama International, Swiss-Belhotel International and Domain Hotels also announced development of hotel properties in Bahrain, the CRE report said.
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