‘Lower commercial rents offer special advantage for Bahrain’

Commercial rents are 60 percent and 61pc lower in the Kingdom compared to Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC), according to a report. Cost of running a business is favorable in Bahrain when compared to certain popular locations in the UAE, thanks to the low commercial rents in the country, the report released by UK-based property consultancy Knight Frank, said.  

The report also stated that it is 35 percent cheaper than Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC).   “Using KPMG’s cost of doing business in Bahrain (Financial Services) 2018 report, it can be seen that on a total costs basis, when looking to accommodate one CXO, two heads of department, two directors, five managers, and 10 analysts, Bahrain is 35pc cheaper than Abu Dhabi Global Market (ADGM) and Dubai International Financial Centre (DIFC). “Commercial rents for accommodating these 20 employees are 60pc and 61pc lower in Bahrain compared to ADGM and DIFC respectively,” the report stated. “Bahrain’s commercial office market continues to be dominated by weak occupier demand coupled with oversupply, a legacy of the 2001 to 2007 construction boom.

“This supply-demand imbalance has endured since 2010 when the full effects of the global economic downturn hit Bahrain. “Starting in 2010, Manama’s office market become increasingly favorable to tenants with headline rental rates falling by circa 45pc to 50pc from the peak in 2008. “However, last year saw the market stabilize with rent falls abating, a sign that the market has bottomed out, though it remains to be seen when rental growth will return to the market due to the elasticity of the supply pipeline. “As a result of the economic backdrop, the rate of completions has slowed dramatically since 2014 which has avoided any compounding effect of the supply-demand imbalance.”