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Bahrain's real estate market continues to adjust to the realities of the post-credit crunch era according to property developer DTZ in its report for the first quarter of this year.
This follows on from last year's report, which stated that 'Bahrain's property market is proving resilient in the wake of the global recession'.
Bob Addison, country manager for Bahrain, said: "Bahrain's real estate market continues to feel the effects of the global downturn.
"The mini-boom that Bahrain witnessed from 2006 to 2008 has now been replaced by a more pragmatic and conservative market.
"Going forward, developers and investors need to focus on the core drivers of the market - location, infrastructure, quality of product and facilities - as the basis for enhancing real estate values."
Bahrain's retail market has seen huge growth over the last 10 years, with total stock increasing from 200,000 square metres gross lettable area (GLA) in 2000 to 536,000 sq/m GLA in 2010. This expansion has been driven by strong population growth, increased disposable incomes and a continual supply of retail tourists from Saudi Arabia and other GCC countries.
Bahrain's main retail destination, Seef District, has reached saturation point with the success of any individual mall being at the expense of another. As a result, much of the future retail growth is being planned within the major developments or larger residential areas in order to offer the local residential population a retail choice closer to home.
Amwaj Islands, Reef Island, Durrat Al Bahrain, Raffles City, Villamar, Water Gardens, Riffa Views and Diyar Al Muharraq all plan to incorporate significant retail elements into their schemes. Retail within these developments accounts for 51 per cent of the total planned retail growth over the next five years.
Total office stock in Bahrain has grown significantly in recent years and has more than tripled since 2000. As of April 2010, the total office stock in Bahrain stood at approximately 630,000 sq/m.
However, the current stock levels, coupled with the overall effects of the global economic slowdown, have caused a significant oversupply leading to saturation in the office market.
