Challenging economy can boost Bahrain real estateby Paromita Dey on Jan 19, 2016
As GCC markets are forecasted to face prolonged economic challenges over the coming months, Bahrain looks set to be protected from the blow by continued infrastructure investment from the GCC aid fund, according to a report.
As per property consulting firm CBRE as part of its Q4 2015 Bahrain MarketView, despite negative impacts of the on-going oil slump, the real estate sector in Bahrain has proven resilient, with solid returns still considered achievable.
This was underlined by the 7% growth achieved within the construction sector during early 2015, as a raft of new development projects were launched across all real estate asset classes, but notably in the retail, hospitality and residential sectors.
Steve Mayes, director, Middle East research, CBRE Bahrain commented: “This growth was underpinned by investment in large scale infrastructure projects, supported by the US$10 billion GCC aid fund, including the multi-billion Bahrain Airport expansion and the expansion of government affordable and social housing schemes, are also at the forefront of this trend.”
With the retail and hospitality sectors rapidly approaching saturation point and the commercial office market still laboring amidst weak demand, the residential sector may present opportunities for investors to leverage key advantages that Bahrain enjoys over other GCC markets.
Mayes commented: “If you consider that real estate costs per square metre for apartments in Bahrain average $2,072 and $5,037 in the UAE and that transaction costs are significantly lower in Bahrain, a case can be made for the residential sector offering potential investment opportunities, supported by a low real estate cost base, attractive business costs and Bahrain’s popularity as a place to live for MENA and western expatriate families and bachelors.”