Top office space supply doubles in Bahrain
Manama, October 4, 2010
Supply of top office space in Bahrain more than doubled in the last five years, reaching around 850,000sqm, says a new report.
The report, released by Bahrain-based property solutions firm Cluttons, provides an overview of real estate trends in the kingdom for the third quarter of this year.
It reveals the commercial sector is following a downward trend as the supply of Grade A and B office stock in Bahrain has more than doubled in the last five years. This, it says, has subsequently created a tenant-favourable market where cost-conscious occupiers have the ability to relocate to newer premises for comparable or lower rents.
In areas like Seef District and Sanabis, the report estimates that there is around 93,000sqm of vacant office accommodation within completed buildings, almost 11 per cent of the total Grade A and B office stock within the main commercial areas of Bahrain. It reveals Juffair has grown to be the main location for new apartments.
However, it said that the construction, or planned construction, of some 40 new apartment blocks is exerting downward pressure on values for both leasehold and freehold units in the area.
“Much of the residential property in Bahrain was originally planned to be sold on a freehold strata basis, however the current economic challenges have led many of the developers to rethink their models and offer the apartments for rent,” a statement from the company reads.
“With some rents falling by as much as 30 per cent over the past year, landlords have been forced to offer increased incentives and services such as furnishing, housekeeping and satellite subscription.”
In contrast to markets such as Dubai, says the report, the practice of landlords offering rent-free periods has not gained traction in the Bahrain market. This resulted in effective rents and headline rents falling at approximately the same rate, the report concluded.
It says Bahrain’s industrial sector has been buoyed by the announcement of a number of major manufacturers locating here, bringing with them jobs and investment to the local economy. “These incoming companies represent valuable additions to the industrial sector and show that the strategy of offering heavily subsidised land has had some success,” it said.
The overall findings of the report concludes that Bahrain continues its modest economic recovery with estimated growth rate of 4 per cent this year and 5.5 per cent in 2012. The figures are in line with the International Monetary Fund’s forecasts for the Middle East region as the Gulf looks to build on the past two quarters of positive growth, it said.-TradeArabia News Service