Bahrain Real Estate Market Highlights Resilience And Sector Performance In H1 2025

The Bahrain Real Estate Market Review for the first half of 2025, produced by CBRE Middle East, a global commercial real estate services company, has shown a notable increase in transaction volumes with a 16.4% jump compared to the first half of 2024. This growth is mirrored in transaction values which rose by 3.9% to reach BHD775.2 million, despite the performance across various sectors showing little significant change.

In the hospitality sector, there has been a significant uptick in tourist arrivals, growing by 19.9% to nearly 14.9 million in 2024, as reported by the Bahrain Information & eGovernment Authority. This increase in tourism has led to slight improvements in hospitality key performance indicators (KPIs) in the first half of 2025.

However, the capital city Manama and the larger Bahrain area experienced different dynamics in terms of occupancy, average daily rates (ADRs), and revenue per available room (RevPAR), with luxury and high-end resorts outside Manama driving most of the growth.

In the residential sector, the market dynamics were mixed. The first half of 2025 saw a decrease in the average sale rates for apartments and villas by -2.0% and -2.3% respectively, compared to the latter half of 2024.

Despite these declines, a strong demand for affordable housing was evident, with 2,584 housing finance applications approved during this period. Additionally, while apartment rents saw a slight increase of 1.0%, villa rent rates continued their marginal decline, falling by -1.0%.

The office sector witnessed a stable average rental rate of BD5.1/sqm/month for Grade A & B office spaces from the second half of 2024 to the first half of 2025. This stability came amidst a constant influx of new supply and a steady demand.

The sector saw a higher demand for pre-fitted office spaces over shell and core units, underscoring a trend towards reducing upfront costs and achieving faster occupancy. Moreover, there is a growing emphasis on sustainability within the region, with new developments aiming for sustainable design and international certifications like LEED.

The retail sector observed a slight decrease in average occupancy to 66.9% in the first half of 2025, attributed to the expansion of leasable area, particularly with the opening of Avenues Phase 2. Despite this, half of the malls tracked had stable or improved occupancies.

Super regional malls now represent 29% of total retail Gross Leasable Area (GLA) in Bahrain, with regional malls holding the largest share at 37%. This sector's dynamics underscore the pressure on smaller retail centers to innovate and attract foot traffic amidst growing competition.

Heather Longden, director at CBRE Bahrain, highlighted the overall positive trajectory of Bahrain's real estate market in the first half of 2025, with increases in both transaction volume and values as per the Survey and Land Registration Bureau (SLRB) data.

Longden noted, "Bahrain's real estate market in H1 2025 demonstrated positive movement in transactions, with a 16.4% increase in volume and a 3.9% rise in transaction values according to the SLRB, despite limited change in the segments tracked by CBRE. While the residential sector saw mixed performance, there was a marginal decline in actual recorded sales rates.

"The retail sector faced occupancy adjustments due to a notable increase in GLA stock based on new supply coming on stream. The office sector remained stable in terms of average rents, with a continued preference for pre-fitted spaces. The hospitality sector continued its positive momentum in terms of growth in tourism figures; however, gains were marginal in key performance indicators."

While transaction volumes and values have seen a healthy increase, sectoral performances have been mixed, with notable trends towards sustainability and a preference for pre-fitted office spaces. The retail sector is adapting to increased leasable areas, and the hospitality sector benefits from a rise in tourism, though gains in performance indicators remain moderate.