Residential and Office Rental Market in Bahrain: More Than 20% Drop in Prices

Mohammed Younis Shafi, Director of Serene Landmark, discusses the residential rental and office rental market in Bahrain.

According to Shafi, the rental market has fallen more than 20%: “It’s not actually 20%. It had fallen much more but in the last 6 months it has started to recover a little bit. We are still lower than the 2009 and 2010 values. This is because many employees have gone and many companies have packed up their operations and moved to another country. This has affected the rental prices.”

“I think you need a 20% drop because if you are fully capped, then the rental market will go sky-high which is unaffordable like what happened earlier. People were not just sharing a room, they were sharing a bed,” adds Shafi.

Discussing the occupancy rates, the situation seems dismal likewise: “As well, the local political situation in the Seef area, where we are mostly located, has affected us very badly. Even in our hotel apartments, there is a 20% occupancy. How can we survive with a 20% occupancy? At 60% you can break even but at 20%, the money has to come from our pockets to survive,” says Shafi.

Commenting on the effects of the crises on real-estate investment, Shafi sees 30% decrease: “It’s had a big effect but it’s more like 30 to 32%, not 50% because real estate does not work on 50%. If you go back to the original price and the structures we are doing, 50% would mean we are below the cost. Between 2006 and 2008 the market increased by 300%. If we are talking about investments, then I would agree it is at 50% or even higher.”