Bahrain Real Estate Report 2016

Bahrain Real Estate Report 2016

BMI View: The country's economic dependence on the hydrocarbon sector has created challenges forBahrain's commercial real estate sector, considering the precipitous drop in commodity prices. However,we expect rental rates to remain fairly stable for 2016 across each of the sub-sectors we cover, as demandfor retail and office space rises.

Bahrain is a small island nation with a population of just over 1mn. The Gulf state is regarded as one of themost prosperous Middle Eastern countries, with an increasingly affluent population, a successful financialsector and improved economic diversity as a result of governmental structural reforms. However, thehydrocarbons industry remains important to the economy, with most of that sector in Bahrain now involvedin refining and other areas, as Bahrain now produces only about 48,000 barrels per day. Bahrain thus facesthe challenge of how to maintain growth in the face of lower oil prices, and real GDP growth fell from 4.5%in 2014 to 2.9% in 2015 as a result of falling oil prices.