Real Estate Market in Bahrain –Rental Vs. Sales Analysis Report, Abdulrahman Alkooheji, General Manager Bin Faqeeh

By: Abdulrahman Alkooheji
General Manager
Bin Faqeeh

The Kingdom of Bahrain continues to be a sought-after location for organisations looking to establish a base within the GCC. The real estate sector in the Kingdom has been a strong contributor to its economic growth, solidifying its strength across the GCC. It offers promising opportunities to international investors in the form of  properties which are either bought for own consumption or investment.

Bahrain offers attractive opportunities in conducting business and thanks to its central location in the Middle East, it also offers direct connection to the region’s largest economy – Saudi Arabia. These two key factors help Bahrain solidify its strong position as a hub location for businesses. Bahrain is often an option for GCC nationals and expatriates to buy second homes, vacation homes or just to diversify their investment portfolio.

Since the most important factor for choosing Bahrain as an investment destination is the rental yield, the demand for investment in properties is derived from the demand for rental properties i.e the availability of tenants and their preferences. GCC nationals also buy properties as vacation homes or for self-consumption. In such instances, their preference is similar to that of other Arabs buying for consumption. The total rental market is worth BD 443 million per annum, with expatriates accounting for more than 70 percent of the rental market in terms of value (80 percent in numbers). Out of the total Bahraini population, only 27% rent while others live in self-owned or family-owned houses. 

Thanks to the ease with which business can be conducted in Bahrain, the real estate market will continue to present opportunities for investors across the globe as the government offers 100% foreign ownership to investors and expatriates in the Kingdom. Since there is an increase in population due to foreigners looking for better jobs in the Kingdom, the demand for rental residential properties will also increase.

What do residents in Bahrain demand?
Bahrain’s population is so diverse that it is important to understand the cultural preference of residents here.

For example, our studies with Falak Consultancy and Cluttons showed that the renter profile of Pakistani and Indian residents earning between BD1,000 and BD3,000 per month in Bahrain are attracted by convenience. 81% seek close proximity to the workplace; 78% seek close proximity to schools but only 57% seek proximity to retail areas.

When compared against the renter profile of UK and other nationals, the results showed that while 82 percent seeks close proximity to schools, 77 percent prefer closer proximity to retail outlets and 63 percent prefer close proximity to the workplace.

Other factors considered important includes facilities for adults and children, security, parking and furnishings.

Understanding this data is critical to real estate developers being able to fulfil the demands of a diverse population of  both renters and investors.

What are the key residential locations in Bahrain?
According to Falak studies, the most attractive key residential locations in the Kingdom due to location, luxury and affordability are Reef Island, Amwaj Islands, Bahrain Bay, Riffa, Saar, Hamala, Juffair, Adliya, Mahooz and Hoora. These are the areas where most of the expatriates reside for rent.