Bahrain’s construction sector has weathered the storms of wider economic challenges as the country’s real estate market continues to perform well, according to an end of year report by UK consultancy CBRE.

The report adds that the construction sector has witnessed growth of 7.2 per cent in 2016, attributing this growth to ongoing retail and hospitality developments across the country.

Despite this, future growth could be threatened as contract awards decline amid reduced spending from both government and private sector clients. According to regional projects tracker MEED Projects contract awards in the construction sector sat at approximately $5.9bn in 2016, a 33.7 per cent decline from 2015 when contract awards totalled $8.9bn.

“The forefront of retail development is The Avenues, an Alshaya Group led project, at Bahrain Bay Corniche, phased to open partly in late 2017. The development is expected to provide 38,000 square metres of total leasable retail space and an impressive range of facilities,” says associate director at CBRE Bahrain, Heather Longden.

According to the CBRE Bahrain Market View report, the luxury hospitality segment also continues to see growth in development. There are currently 111 hotels operating in Bahrain, with the most recent opening being the Downtown Rotana. However, this figure is set to rise, with the Wyndham Grand at Bahrain Bay, the Marriott Residence Inn at Water Garden City and The One & Only Resort all expected to open this year.

Another area of particular growth will be Bahrain’s drive to build affordable and social housing. Bahrain’s Ministry of Housing recently awarded the main construction contract for the first phase of its Al-Ramli housing project to a local joint venture made up of Al-Mezeal Construction and Services, Al-Haddad Construction Company, Mohammed Saif Ajlan al-Mannai and Al-Nisr Construction Company.

The development of housing schemes is likely to remain a priority for the government that has already secured funding for a number of schemes from neighbouring GCC governments in recent years.