Key Takeaways
- Transaction volumes fell by 18.78% year-on-year, but transaction value increased 3.67% to BHD 283.7 million, reflecting investor focus on high-value assets.
- Rental and occupancy rates across residential, commercial, and retail sectors remained stable, showing market maturity.
- Muharraq and Capital Governorate continue to lead the residential market in both rental and sales prices.
- Industrial rents range from BHD 2.6 to 3.1/sqm, with Tubli and Salmabad commanding the highest rates.
- Hospitality performance dipped slightly due to Ramadan but remains fundamentally strong.
- Land prices range from BHD 17.5/sqm (industrial) to BHD 74/sqm (BA zones), reflecting zoning density and urban demand.
- Bahrain’s GDP is forecast to grow 2.8% in 2025, driven by non-oil sectors, FDI, and financial innovation.
- Outlook for 2025: steady performance, premium asset growth, and long-term investment stability.
The Bahrain real estate market in Q1 2025 showed mixed performance, marked by stable fundamentals and shifting investor dynamics. According to ASK Real Estate, total transaction volumes declined by 18.78% year-on-year, reaching 4,974 transactions, while total transaction value rose 3.67% to BHD 283.7 million, reflecting sustained demand for premium properties and high-value investments.
Market Performance and Key Indicators
- Rental and occupancy rates across residential, retail, and office sectors remained stable, underscoring market maturity and balanced supply-demand conditions.
- Hospitality performance softened due to Ramadan, with occupancy at 52.1%, ADR at BHD 62.9, and RevPAR at BHD 32.8.
- The industrial sector maintained affordability, with warehouse rents ranging from BHD 2.6 to 3.1 per sqm, led by Tubli and Salmabad.
Residential and Commercial Trends
- Muharraq and the Capital Governorate continued to lead in both rental rates and sales prices, supported by branded residences, waterfront developments, and high-end projects in Bahrain Bay and Reef Island.
- The Northern and Southern Governorates remain value-driven, catering to mid-market buyers and affordable housing demand.
- Office rents averaged BHD 4.8 per sqm in the Capital, while retail rents peaked at BHD 7.8 per sqm, confirming continued business confidence in established hubs.
Land and Investment Insights
- Land values followed a clear zoning hierarchy, ranging from BHD 17.5/sqm in industrial zones to BHD 74/sqm in BA zones, driven by high built-up ratios and strategic urban planning.
- Investor sentiment remains resilient, supported by Bahrain’s economic diversification, FDI inflows exceeding USD 6.8 billion, and infrastructure projects tied to the Golden License program.
Economic and Policy Context
- The IMF projects Bahrain’s GDP growth at 2.8% in 2025, with strong momentum in non-oil sectors, digital banking, and manufacturing.
- The introduction of a 15% global minimum tax for multinational enterprises underscores Bahrain’s alignment with international standards.
- Trade and tariff changes in global markets could affect borrowing costs and property demand, yet Bahrain’s diversified economy remains well-positioned for long-term stability.
Outlook for 2025
ASK Real Estate expects stable rents, selective growth in premium developments, and continued investor confidence throughout 2025. Despite global economic headwinds, Bahrain’s real estate sector is set for sustained, quality-driven growth, reinforced by infrastructure investment, tourism initiatives, and an increasingly mature regulatory environment.
