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Bahrain real estate sales forecast to reach $5bn

Residential real estate sales in Bahrain could be worth more than BD2bn ($5.3bn) in 2008 if current levels of activity continue, according to a report from international property agent DTZ.

The report, released on 13 October, says real estate transactions in the first quarter of the year reached BD540m.

If these levels of activity are sustained for the year as a whole, turnover is expected to reach BD2.15bn, a 58 per cent increase on 2007.

The record levels of transactions are being supported by strong local demand, a relaxation of foreign ownership regulations and improved mortgage products.

While more than 90 per cent of people buying property are local nationals, DTZ says there has been an increase in non-national investors over the last five years, particularly from Saudi Arabia.

Projects such as the Amwaj islands, Reef island and Marina West will significantly add to the residential stock in the medium-term.

DTZ estimates there are in excess of 60,000 residential units currently under construction or planned as part of such megaprojects.

The report also warns that Bahrain may suffer from an oversupply of office accommodation in the medium-term if all the planned commercial schemes go ahead.

The country currently has 500,000 square meters of office space – twice as much as it did in 2000. However, a further 550,000 sq m of office stock is in the pipeline, most of which is not pre-let.

The firms estimate there is currently 280,000 sq m of retail space in Bahrain.

This is also set to double over the coming five years, with more than 369,000 sq m of retail space in development.

The country will need to rely on continued strong demand from visiting shoppers to sustain this growth, particularly from Saudi Arabia, Kuwait and Qatar.

Source: MEED