Bahrain is seeing a major uptick in the demand for office space, with a 5.5 percent jump in office space in the first quarter of 2022 over the same year-ago period, fuelled by an improvement in economic sentiment and growth in the non-oil sector, a latest report said.
The Grade B and Grade C project offerings across the city have particularly seen an increase in occupier demand over the last few quarters on account of relative affordability, said the report by Savills, a leading real estate service provider.
Savills, however, said rental values across Grade A developments have remained stable during the quarter.
Foreign investments into Bahrain have been seeing a surge of late, with the country receiving $1.77 billion overseas investments in 2021, a jump of 73 percent from that in 2020.
The rise in foreign investment inflows also seemed to have a rub off effect on the residential real estate sector in the country, with the overall residential capital values remaining upbeat for a full year as of June 2022, Savills Q2 2022 Bahrain Property Market update showed.
The uptick in the residential sector was largely driven by a 2.9 percent quarterly increase in the pricing of mid-end villas, the report said.
Apartment capital values also saw a marginal increase of 1.2 percent in the mid-end sector during the period.
Low-end apartment sale prices, however, have failed to display any price growth over the past two years owing to the competitive pricing of the mid-end segment, Savills said.
In the rental market, the villa segment continued to perform strongly with 3 percent q-o-q price growth amid increased demand as renters seek more space.
n the other hand, mid and high-end apartments were unchanged for the second consecutive quarter while low-end apartments recorded quarterly declines of 3.6 percent, pressured by the increased supply of better units at competitive rates.
Commenting on the outlook for the commercial sector, Swapnil Pillai, associate director research, Middle East at Savills, said Bahrain continues to lead as a preferred choice for fintech and other related companies in the region, resulting in the steady uptake of office space.
“Developer offerings across the city are evolving in line with the occupier demand. We therefore anticipate higher occupancy levels across developments that cater to changing tenant requirements, especially relating to modern space design,” Pillai said.
Hashim Kadhem, head of professional services, Savills Bahrain said a strong growth in non-oil GDP during Q1 2022 has created positive momentum which has spilled over into the real estate sector.
“Price and rental growth has therefore remained largely stable or grown. However, we will continue to monitor inflation data, which might result in further interest rate hikes by the Central Bank of Bahrain, presenting itself as a downside risk to the pace of growth,” he said.
Source:https://www.arabianbusiness.com/gcc/bahrain/bahrain-sees-uptick-in-office-space-demand-with-5-5-percent-jump-in-jan-march-this-year
