Flip through the latest issue of Gulf Weekly.
Manama has not been immune to the recent downturn in the global property market with an oversupply of high-end real estate and prime office space, according to Knight Frank Middle East's recently-released 'Bahrain Property Highlights H1 2010' report.
Jim Lynn, head of research and consultancy, Knight Frank Middle East, commenting on the residential sector, said: "Although there is significant pent-up demand for affordable housing, with 47,000 already on the government's waiting list and a young and growing population adding to demand, developers in Bahrain are failing to meet the needs of this market.
"Meanwhile, there is an oversupply at the high-end of the market, and with 5,000 luxury apartments currently in the development pipeline, this situation is only set to worsen.
"Vacancy and rental rates for gated villa compounds in the Northern Governate have shown only small fluctuations in recent years. Vacancy rates for Capital Governate apartments have been on the increase due to new stock coming online, however landlords have yet to reduce rents to reflect this market reality.
"Sales of freehold villas and apartments have been almost non-existent in Bahrain over the last two years, with prices dropping an average of 20 per cent from 2009 rates as a consequence."
Knight Frank is a leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents.
The company has been providing clients with Middle Eastern advice for the last eight years and has now established Knight Frank Middle East, headquartered in Bahrain. Current clients include major developers and financial institutions across the region.
As far as the commercial sector is concerned Mr Lynn highlighted the dramatic rise in the Seef district's popularity but says the report reveals monthly rates are down across the board.
He said: "Bahrain's labour force is predicted to reach over 500,000 workers this year, with approximately 56,000 occupying over 830,000 square metres of Grade A and B office space in the country. This increase in demand for office accommodation has been significantly exceeded by unprecedented levels of commercial development, and total stock in Bahrain is set to pass the one million square metre mark this year.
"Therefore, average vacancy rates for prime space are set to exceed the current levels of 20-25 per cent.
"The rental model still far exceeds the strata-title sales market in popularity. However, monthly rental rates are down 20 per cent from 2009 levels, whereas average sales rates have decreased by just over 10 per cent.
"Current monthly rates for prime stock are topping out at BD12 per square metre ($32), with occupiers of large areas able to negotiate down as low as BD7 per square metre. Average sales rates stand at BD1,100 per square metre. Al Seef District seems to be emerging as the next 'central business district', with tenants looking to take advantage of opportunities for improved road infrastructure and parking ratios."
