An increasing number of residential developments are reducing the average monthly rent in Bahrain.
According to a just-published report, the vacancy rate in Bahrain’s residential market stands at around 28%. The average current value for a residential apartment amounts to BD 4.60/sq.m/month, more than a 10% drop compared to the same period last year.
The statistics were published by Kuwait-based KAMCO Investment Company KSC (KAMCO), a subsidiary of United Gulf Bank which specialises in asset management and financial services in Kuwait and the Middle East and North Africa (MENA).
Bahrain Real Estate Investment Company (Edamah), one of the Kingdom’s leading property developers revealed that the vacancy rate in the Southern Governorate is more in comparison to the other Governorates.
The Southern Governorate is the largest in terms of area among the four Governorates and consists of Jaww, Askar, Awali, Riffa, and Zallaq.
Earlier this year, PropertyFinder, an online real estate platform, ranked West Riffa, Riffa Al Sharqi, and North Riffa as the most affordable residential areas for apartments. North Riffa, Diyar Al Muharraq and West Riffa were ranked the most affordable areas for villa rentals while Seef District and Manama remain the highest priced for office rentals.
With the vacancy rate for office real estate crossing 22%, landlords continue to remain under pressure to find tenants to occupy vacant office spaces despite monthly rents continuing to decline.
The geopolitical situation has also contributed to the decline in residential and office rentals.
“The geopolitical situation has considerably led to tenants renegotiating their lease terms and potential investors to put a hold on their expansion plans until further notice,” says Mr. Raed Hatem, Edamah’s Head of Asset Management.
“The leasing market trend is declining across all asset classes, with some areas of Bahrain being noticeably affected more than others. Currently, it is a buyers market, where transactions are seen at the buyer’s price,” added Mr. Hatem.
According to the Bahrain eGovernment official website, there are currently ten major real estate development projects for a number of residential as well as office properties across the country.