Ishbiliya Village Project to Attract Bahraini Families

Interview with Saleem Elias A. Aziz, Acting CEO of Al-Enma’a House for Real Estate

What is your assessment of real estate sector in Bahrain?

The first quarter of 2011 has been dominated by the civil and political unrest. In terms of the Bahrain’s real estate market, there is an oversupply of developed properties. However, there is still a high potential for the affordable housing projects.

Real Estate Developers need to offer products which are customer-focused and affect the Bahraini economy as a whole. We believe that there is an immediate need for affordable housing in Bahrain. Real estate sector not only plays an important role in boosting the economy but also affects a lot of other related businesses and industries i.e. furniture, sanitary, building materials, electronics etc.

We rely a lot on the foreigner (and regional) investors and recent steps taken by H.E. the King and the Prime Minister and the Crown Prince will certainly boost the investors` confidence, especially the dialogue which the King has introduced recently. Regarding the real estate sector, Saudi Arabia shows the highest rate of growth in the region – this is expected to be translated to Bahrain as well.

I believe the future of real estate sector in Bahrain is positive and we are already working towards recovering the sector through customer focused strategies.

What are the effects of the February crises on the prices and demand?

The current crises have affected the price and demand adversely; however, if you present a good product to the customers, they feel value for the money and do invest. The prices for the raw (undeveloped) land have dropped significantly.  

A lot of real estate companies in Bahrain are holding lands at a very high value because they bought these lands at the time when prices were at boom. The higher valuation of land is affecting the feasibility of various projects that could have been carried out by the real estate companies.

Can you tell us more about your current projects?

Concerning our projects, first I would like to brief about our housing project “Ishbiliya Village“. The project consists of 243 houses, relates infrastructure, a community centre. The community centre consists of a big shopping mall, kindergarten, sports facilities and others. This centre will serve not only for the families living in the project but also for the whole vicinity.

The project offers two types of houses: attached houses and villas which are suitable for middle-income families. The value of these houses ranges between BHD 120,000 to 150,000. The houses are semi furnished including all the equipment needed such as furniture, kitchen equipment, the AC`s etc. The costs of this project reach up to $150 million.  

In which way is the project special? How does it differentiate from the other projects?

The “Ishbiliya Village“ project is special because we started by working with the local consultants who has provided us with very nice simple lay-out plan. In the project we have followed various themes with different elevations which are not repeated. So, the houses differentiate from each other.

Even though the houses built-up area is only 240m2 if you go inside the house, you will feel the space. There are three big bedrooms, two to three bathrooms, internal and external kitchen, and servant quarter. The overall difference between us and the others lies in the quality and affordable price. We provide quality at an affordable price.

Who are the people who are going to live in these houses? Who do you target?

Actually, we targeted middle-class Bahrainis. We have already completed the project and infrastructure works which consist of building roads, street lightning, sewerage, drainage and also water and electricity lines. Some of the families have already moved in. In August, we are having a big advertisement campaign, so that we can sell all of the houses. At the same time, we have met the Government authorities to create an inlet and exit leading to the Sheikh Khalifa Highway, so that people living in “Ishbiliya Village“ can reach for example the Seef Area in 4 to 5 minutes.

Now that the project is finished what is your biggest challenge? Before – 3 years ago – it was probably about completion of the project, choosing the best contractors. Now, there are probably new challenges standing ahead of you, so what is nowadays your biggest worry?

To be honest, the “Ishbiliya Village“ project has been completed successfully and our current challenge is the preparation of more development projects for affordable housing. We are trying to push the prices down for future projects in the range of BD 70,000 to 100,000 while keeping the same land and built-up area.

Again, we want to produce good quality products at an affordable price. In Bahrain, there is a lot of need especially for affordable houses; the waiting lists with ministry of hosing are very long.

Yet, a lot of companies in Bahrain have now abandoned luxury and everyone is moving into affordable housing.

Yes, you are right. Actually, lots of the luxury projects like Al Durrat and Amwaj are too expensive for Bahrainis. Most of Bahrainis fall in low- to middle-income groups. Thus, we should do more affordable projects. There is still space demand for such projects.

Even though the Government is building a lot of affordable houses, the private sector has its own strategies for the same range houses. I think, we should have a stronger Government support for the private sector. For example, in the case of developing affordable houses, the Government could help us in terms of building the infrastructure etc.

I also believe that Government should consider giving subsidies towards the prices of land to the real estate companies. This subsidy will make a lot of projects feasible for affordable housing and will push the developmental projects in the sector.

Regarding the “Ishbiliya Village“ project, have you received any feedback from the people who already live there?

Yes, we met with them and they are very happy about the houses and they are doing some landscaping themselves and they are waiting for the inlet and exit which would connect them to the Sheikh Khalifa Highway.

As mentioned above, an advertising campaign will be launched in August and we might bring initiatives that will interest more people to buy the houses.

Can the buyers also receive some forms of subsidies from the Government in order to buy the houses?

Some of the people are listed in the Ministry of Housing loan programs, so they might get some money from there and we are also offering a long-term loan in cooperation with KFH, which can be repaid in 15 to 20 years with the installment payments ranging between 800 to 1,000 BHD per month.

Could you tell us something more about the project of the commercial mall?

The second project of Al-Enma’a House is a commercial mall which is located at East Riffa. The mall consists of approx. 27 000 m2 of leasable area and the built-up area is approx. 58 000 m2. The mall is in final stage of completion and we have already signed contracts with the anchor-tenants and with a lot of investors who would lease the shops.

 The mall is set to become the retail destination of residents in Riffa, predominantly from middle to high-income customer groups. We are bringing a mix of renowned regional and international brand for the mall.

The mall has ground plus two levels having a total of 105 shops, four anchor stores (Hypermarket, Fashion Department, Family Entertainment Centre and Electronics Store), 14 food court outlets and other Casual Dining Restaurants & Café.

We are expecting to start the mall from lower half of this year.

Do you think there is still some space left for such commercial malls in Bahrain? There is Seef Mall, City Centre Mall to name few.

Yes, East Riffa is one of the places that need such commercial malls to be developed at to serve the growing number of middle to high income families of Riffa and its surrounding residential areas and neighboring Saudi Arabia, thus, East Riffa is one of the very good places with an easy access for the customers.

Could you comment on the availability of credit lines for real estate companies?

There is certainly a real concern about the availability of financing for the real estate companies. Majority of the banks in Bahrain are reluctant to provide financing for the real estate projects. However, there are banks which can support the real estate companies if a good and feasible project is presented to them.

We hope that the banks will also buy the idea of affordable housing and will provide more credit lines to the real estate companies.

If you projected yourself and your company in 5-years time, what would you like to achieve; where would you want to see your company? What is your strategy for the new future?

We are foreseeing a very bright future ahead of us as we are finalizing our current development projects with rental income generating opportunities. A lot of things are under pipeline and if they materialize as we expect, we will grow along with the growth and welfare of the whole society.

As for the future, we are primarily focusing on the development projects for the affordable housing and we are also looking forward to start various other developments.