INVEST OR LIVE? BAHRAIN’S WATERFRONT HAS IT ALL

The pristine coastlines of Bahrain are experiencing unprecedented investment attention as the kingdom's waterfront developments emerge as prime targets for global capital. 

The country's strategic location, regulatory incentives and diversification efforts are reshaping its real estate landscape, particularly along its 161 kilometres of coastline.

STRATEGIC POSITIONING IN A COMPETITIVE MARKET

Bahrain's waterfront properties are attracting significant investor interest due to their competitive pricing compared to neighbouring Gulf markets.

In addition, Savills' Bahrain Property Market 2024 report highlights Bahrain's property market as offering "steady progress" with promising horizons ahead, noting that waterfront developments in particular have shown resilience even during global economic uncertainties.

Moreover, the kingdom's strategic position as a financial hub with established banking infrastructure provides investors with robust financing options and streamlined regulatory processes, making property investment a seamless process.

REGULATORY FRAMEWORK DRIVING GROWTH

Another reason for Bahrain’s continuing appeal as a destination for real estate investors is the government's proactive approach to foreign investment that has been instrumental in attracting capital to coastal developments. The Real Estate Regulatory Authority (RERA) has established a framework that has streamlined approval processes and enhanced investor protections for large-scale waterfront projects.

Foreign ownership restrictions have also been progressively relaxed, with designated investment zones along prime coastal areas now permitting 100% foreign ownership, as highlighted by the Bahrain Economic Development Board. This policy shift has corresponded with a significant increase in international investment in waterfront properties.

FLAGSHIP DEVELOPMENTS TRANSFORMING THE COASTLINE

But, without a doubt, Bahrain’s re-emergence as a property investment destination can be attributed mainly to the development of several landmark projects that focus on transforming its waterfront landscape.

The Oxford Business Group reports that Bahrain has seen a significant boom in waterfront developments in recent years, creating distinctive high-end residential and commercial segments. These include the Bahrain Bay development, a major waterfront district, which was designed by Skidmore, Owings & Merrill (SOM), the architectural firm behind Dubai's iconic Burj Khalifa.

From just being an ambitious concept, Bahrain Bay today has become the heartbeat of a city in motion. From luxury residences to high-end offices, green public spaces to five-star hotels, the $2.5 billion waterfront district is proving to be more than a skyline update, it’s a real estate story of national progress. It exemplifies thoughtful urban planning that prioritises connectivity and flexibility.

Spanning approximately 450 acres on a man-made island in Manama, Bahrain Bay already boasts international hospitality brands such as the Four Seasons Hotel Bahrain Bay and the Grand Wyndham Hotel; the Waldorf Astoria is set to open in 2028.

Diyar Al Muharraq, spanning 12 square kilometres of reclaimed land across seven artificial islands, also represents one of the largest integrated developments in the kingdom. Infrastructure development continues to advance with residential occupancy growing in completed phases.

Another development, the Durrat Al Bahrain resort city, which extends across 15 artificial islands, has shown strong property value appreciation, outperforming the broader Bahraini property market according to many real estate experts.

WIDE RANGING BENEFITS AND INCENTIVES

While location and investment-friendly regulations are strong points for Bahrain, competitive entry points also help make an investor’s decision easy. According to Cityscape Bahrain's guide property investing in the kingdom,  "Bahrain offers significantly lower price points for premium waterfront properties compared to neighbouring Dubai and Abu Dhabi," making it accessible to a broader range of investors.

As well as numerous benefits including self-sponsored residency permits and zero property taxes, another thing going for Bahrain’s real estate market, especially waterfront property developments, is its strong rental yields. Savills' 2024 market report indicates that waterfront properties in Bahrain "continue to generate rental yields between 6-8% annually," outperforming many other investment classes in the region.

SUSTAINABLE DEVELOPMENT AS A MARKET DIFFERENTIATOR

Environmental considerations have become increasingly central to Bahrain's waterfront developments. The Bahrain Sustainable Urban Planning Framework mandates comprehensive environmental impact assessments and integration of sustainable design elements in all new coastal projects.

According to the Mordor Intelligence Luxury Residential Real Estate Market Report, sustainability features are increasingly valued in Bahrain's premium property segment, with environmentally certified properties commanding price premiums in the market.

ECONOMIC DIVERSIFICATION THROUGH TOURISM INTEGRATION

Bahrain's economic diversification strategy also heavily leverages its waterfront assets. The Tourism Strategic Plan targets a significant increase in annual visitors, with waterfront leisure facilities serving as key attractions.

This integration of tourism and real estate development creates diversified revenue streams for investors. The Oxford Business Group highlights how Bahrain's mixed-use developments are enhancing both the high-end commercial and residential segments of the market.

Home to multiple hotels, shopping centres and public spaces, Diyar Al Muharraq attracts over two million visitors each month. Expect more features to materialize in the coming years as the developers aim to complete the entire master plan in the next eight to ten years, with 50 percent of the infrastructure already in place.

As Bahrain continues to develop its coastal assets whilst maintaining competitive pricing and investor-friendly policies, its waterfront developments represent an increasingly compelling proposition for capital looking to establish positions in the Gulf's evolving property landscape.

Anthon Garcia | May, 2025