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Manama Office Overview - Q3 2011

  • The general economic environment remains subdued and  growth is likely to remain slow in the medium term. Although the earlier political demonstrations and civil  unrest witnessed in H1 2011 have now subsided, their wider implications for the economy and real estate market are still being felt with low levels of investment, development and occupier activity relative to historic levels. 

  • Most companies remain highly focused on minimising occupational costs and are looking for a clearer political and economic situation to emerge before embarking on any future expansion or relocation plans. This is having a dampening effect on leasing activity in Manama, which has been subdued in 2011. The limited take-up that has been witnessed is predominately from companies seeking to consolidate or downsize their operations which in turn has contributed to an increase in the overall vacancy rate in the market.  

  • The current supply of office space across the three main CBD’s of Bahrain (Seef District, Central Manama and The Diplomatic Area) is approximately 650,000 sq m with an estimated vacancy rate of c.25%. Although the country has now reached a period of relative stability and many future projects have been cancelled or postponed, the effect on the supply-demand imbalance is not expected to improve in the immediate term and rental levels are likely to move further down throughout the remainder of 2011.
  • As Bahrain strives to retain its role as a regional financial centre, government efforts to support the private sector and reinstall confidence in the market will be crucial for the retention of international companies and attracting future foreign investment.

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