Bahrain rents begin to rise amid stable economy

Bahrain's current economic stability has begun to impact on residential rents, by stabilising rates and encouraging tenants to turn their attention to higher quality schemes, according to the latest report from leading international real estate consultancy, Cluttons.

Cluttons' Winter 2014 Bahrain Residential Property Market Outlook, indicates that increased focus on higher quality developments will begin to put rents under strain at the top end of the market. In turn, it is anticipated that asking rates for such properties will start to nudge upwards over the course of the next six months, as the national stability beds in more widely across the Kingdom, driving more rigorous economic activity and therefore, job creation levels.

Head of Cluttons Bahrain, Harry Goodson-Wickes said: “A number of high quality projects are already experiencing increased interest. At the Kazerooni Homes development in xxx for instance, semi-furnished four-bedroom villas are letting for around BD 1,800 per month rapidly. Tenants are drawn towards these sorts of top tier schemes by the perceived high quality finishing and relative affordability of rents.”

The report also highlights that economic diversification in Bahrain will bring a wider range of tenants to the Kingdom. It cites the residential market's dependency on the regular rotation of US Navy personnel is now starting to be complimented by the slight upturn in tenant demand from the education, law and banking, and financial services sectors, with many tenants new to the Kingdom.

Goodson-Wickes added: “Over the medium to long term, we expect to see an even wider range of tenant requirements, as other sectors of the economy gradually return to growth, creating new jobs and therefore households. We have already seen Bahrain's non-oil sector experience 2.3% growth during Q1, while the government continues its infrastructure investment program, with funding for projects increasing by 2.4% compared to Q1 2013, which in macro terms has translated into rising business activity levels. The real estate sector has and continues to clearly benefit from this.”