Hareesh Nair
Property Manager
Ahmed Al Qaed Group
Property management has become a fast-growing field of expertise in the Kingdom of Bahrain in recent years.
Since the implementation of RERA Regulations in 2018, there has been tremendous improvement in the professional approach to providing quality services in the real estate sector, in particularly high end residential and commercial complexes. The Covid-19 pandemic disrupted the stability of the entire real estate industry in the Kingdom of Bahrain, though associated industries sectors like travel, tourism and retail had a more severe impact.
Apart from traditional challenges such as optimising sales, generating rental revenues in a fast-expanding property inventory, meeting cost effectiveness, delivering quality service to residents and landlords during the pandemic became a tough task to perform. Challenging times always creates opportunities for innovative thinkers and produces more unusual and disruptive outcomes than “normal” times.
During the pandemic there were numerous predicted and unpredicted small to major challenges experienced; however, there were also opportunities created as well.
The demand for residential leasing was declining steadily due to many factors from the last quarter of 2020. Insecurity of expatriate employment, tenants moving from expensive high-end accommodation to more affordable and more cost-effective options and premature contract termination were common initial challenges.
There were fewer operational challenges but there was a marked increase in operational and maintenance costs due to essential supplies pricing, a shortage of skilled manpower in the market and a temporary shortage of skilled real estate team members due to preventive quarantine requirements and mandatory adherence with Covid protocols.
The challenging opportunity created was to retain occupancy by being flexible and adapting to the new market conditions, reducing rent, increasing services, waving rent and utilities for limited periods, and introducing instalment plans to clear arrears, and finding ways of encouraging existing tenants and residents to not only stay but to extend.
Since in-person property visits were not safe and advisable, the effectiveness of digital hands were well tested. The creative use of technology, social media promotions and digital marketing became more prominent and accepted as strong marketing and sales tools during this period.
The property market experienced a fresh wave of sales in the residential apartment sector due to the lower purchase rates offered by developers and owners. Acquiring apartments in well managed and established “luxury” complexes quickly become more affordable for small and medium scale investors. The concept of rent to own was an attraction, yet it has been effective only in a few locations like Amwaj Islands.
There was a change in preference in location observed during the pandemic with buyers and residents choosing to stay away from densely populated areas and selecting less crowded community living and villas, even if it cost a bit more, or was a bit further for them to drive. New developments in Dilmunia Island, Bahrain Bay, Marassi and similar areas were highly favoured by enquirers.
Anticipating a fast recovery in the real estate sector in Bahrain, the current slowdown can be used to upgrade building management systems, introduce strategic planning, enhance auditing facilities, and improve services and training in real estate teams.
“Tough times don’t define you; they refine you”
This article was published as part of the sixth edition of Property Finder Bahrain’s Trends Report.
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