Manama is world's worst performer on rents

Bahraini city bottom of Knight Frank Prime Global Rental Index; Dubai rents up 1% in Q1
Manama is world's worst performer on rents
A construction site in Bahrains capital Manama.
By Andy Sambidge
Sat 30 Jun 2012 09:36 AM

Prime rents in Manama were the worst performing in the world in the first quarter of 2012 while Dubai rent rose, according to real estate consultancy Knight Frank.

Rents plummeted in Bahrain's capital city by more than 16 percent between December 2011 and March 2012, with Hong Kong the next worst performer with rents falling 4.1 percent.

The Knight Frank Prime Global Rental Index also showed that rents in Dubai rose by one percent in the first quarter of this year as its real estate market continues to stabilise after being hit hardest by the global economic crisis in 2009.

The index said Manama's rents dropped 20 percent over the past year while Dubai rents fell 3.9 percent.

Bahrain's real estate market and its overall economic performance has been impacted over the past year by continuous protests.

The island kingdom, a financial hub where nearly $9bn in mutual funds is parked, had been rocked in February and March by its worst public unrest since the 1990s.

Around 30 people died in a month of unrest which brought in Saudi troops, closed banks and shops and triggered capital flight.

Globally, out of 16 real estate markets covered, Nairobi in Africa was the best performer, with rents rising 5.8 percent in Q1 and 14.2 percent over the past year.

Chinese cities Guangzhou and Shanghai were the second and third best performing markets, Knight Frank added.

Prime rents globally rose by less than two percent in the year to March 2012, the weakest annual rate of growth since Q4 2009, the index added.

Knight Frank said the Eurozone contagion, its impact on business confidence and the resulting dip in corporate relocations had led to slower growth in the prime lettings market.

Kate Everett-Allen, international residential research, said: "The index’s subdued performance in Q1 2012 conceals the large variation in city performance.

"The gap between the top and bottom of the results table is 34 percent (annual growth) with cities in Asia Pacific and North America dominating the top half and Europe the bottom.

"Initially London, Hong Kong and New York led the recovery in growth during 2010, when post-Lehman stimulus measures prompted a brief, and it has to be said shallow financial recovery.

"Since 2010 China has been the focus of growth – overshadowing London and New York’s growth."

In May, Knight Frank said Dubai was the world's top performing real estate market in the first quarter of 2012 for growth in house prices.

Dubai recorded a four percent house price rise between December 2011 and March 2012, the index showed, putting it ahead of the likes of Jakarta (3.3 percent) and London (2.7 percent).

Overall, the index showed its first quarterly fall since 2009 as prices fell 0.4 percent on average.

Knight Frank said Dubai's house prices rose 2.7 percent since last September and 0.3 percent over the past 12 months.

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