January 9, 2021 | Bahrain Retail Sector | No Comments
Corona Crisis has led to 18.3% decline in Bahrain Retail space sector in the year 2020. This decline is the combined effect of two factors – reduction in the space occupancy and drop-in average lease rates.
Chart below shows that between 2019 and 2020, the retail space inventory remained almost the same (marginal reduction due to some malls temporarily closing some areas). However, the occupancy ratio dropped from 89.5% in 2019 to 80.7% in 2020.
Further, the overall average lease rate has dropped from BD 9.02 per m2 per month in 2019 to BD 8.19 per m2 per month. This led to sharply lower rental income of the retail properties in 2020.
The chart below shows that the annual rental income in 2019 was estimated at BD 91.1 million that has dropped to BD 74.5 million in 2020 – a sharp decline on 18.3%.
Some of the loss of income maybe temporary as the properties might find replacement tenants in a few months. However, we caution that the decline is severe, and it is continuing. With no visitors from Saudi Arabia, the retailers are finding it difficult to sustain their businesses. The spread of e-commerce is making things more difficult.
We see the rough patch continuing for the retail sector in 2021.
Estater (part of REMI) is the largest real estate intelligence platform in Kuwait and Bahrain. With wide raging database on properties across all sectors, Estater use sophisticated Geographical Information Systems and data science to map and predict real estate market behavior