Bahrain's real estate market outlook is very promising, despite unfavorable financial developments besetting the global markets. DTZ, a real estate advisory firm, said in a report on Monday that Kingdom's real estate market -residential, commercial and retail sectors - has healthy prognosis for 2008. The report said fin significant growth is expected through to 2012 across residential and commercial sectors, with the Kingdom remaining a highly competitive market ripe for investment. Growth is also predicted for retail real estate, though the report emphasizes the danger of oversupply in this sector. According to the report, Bahrain's residential real estate sector is set for a successful year fuelled by strong local demand, relaxed foreign ownership regulations, strong levels of liquidity in the regional market and improved financing options. Although more than 90 percent of those buying property in Bahrain are Bahrainis, the report highlights an increase in non-national investors, mostly from Saudi Arabia. This trend is matched with increased monthly rental prices, with prime monthly rents in the Seef area ranging from BD850 a month for a two bedroom apartment to BD1,800 per month for a four -bedroom villa. Robert Addison, DTZ's country manager for Bahrain and Director of EMEA Retail, said: “The Bahrain residential market still represents an excellent opportunity for investors. With a number of high-end mega-projects currently in development, those looking to buy a luxury property can still do so in Bahrain at a fraction of the price currently being recorded in other markets such as the UAE.” The report noted a different type of growth for Bahrain's commercial real estate sector. It estimates a total of more than 1,000,000 square meters of office space across the Kingdom by 2012, a one hundred per cent increase on the 500,000 square meters currently available. Prime rents for office space across the Kingdom range between BD8-10 per square meter per month in Central Manama and BD10-12 per square meter per month in Manama's Diplomatic Area, reaching highs of BD30 per square meter in the higher floors of the Bahrain World Trade Center. DTZ predicts current demand for office space at 79,000 square metres, of which 30 percent is active and 70 percent is potential. This is driven by banks and financial institutions, which accounts for 35 percent of total requirements. This demand is generally for relatively small units ranging between 200 and 450 square meters, and the report predicts a significant rise in office rents in the short term as initial demand for these size of units remains unmet until large developments come online in 2011. Addison said “by 2012 the market for commercial real estate in Bahrain will have transformed, with the kingdom's current office space doubling by that point. Despite this, we predict that developers will phase development in a way which avoids a glut and we expect to see a rent increase in the short term, at least as Bahrain's economic growth exceeds available space.” The third sector covered by the report is retail space which has seen a period of sustained and significant growth in past years. There are now more than 18 shopping malls on the island, with a total gross lettable area (GLA) in the kingdom's malls of around 280,000 square meters. This GLA figure is set to more than double in the next five years, with over 370,000 square meters in the development pipeline, including the retail components on some of the island's mega-projects. Although the retail market is currently seeing significant success in 2008, this growth cannot be sustained with a consumer base of Bahrain's 800,000 residents alone. The kingdom will look increasingly to the external demand represented by foreign visitors in its immediate catchment zone, including the 6.2 million people expected to enter the country. __
