How Bahrain’s construction and real estate is weathering the crisis

Bahrain real estate market was not hit as hard as the other markets in the GCC.

So those who expect a Dubai-style text on cancelled real estate projects worth billions of dollar and planned dream palaces ending in dust like in Dubai will be disappointed by Bahrain real estate.

Omer Al Mardi, CEO of the BFH Holding Company, knows why:

“In Bahrain real estate there are more than 40,000 applications for new houses which is a large number that includes the middle class and the lower class. You have projects like Al Muharraq that has a population of 100,000 (which is a large portion of Bahrainis population).

The high prices that you got in Dubai or other places have not been the same here, we have been paying the same rent since 1993.”

Statistics from the Ministry of Information about Bahrain real estate suggest that more than nine-tenths of real estate purchases in the country are by Bahrainis or Arabs from the GCC, as Qais Al Maskati, Deputy CEO of RealCapita confirms:

“Most of our customers are active on Bahrain real estate market are GCC-based, up to 95%. There is a good 30 to 40% Bahrainis and the rest are from the rest of the Gulf.”

Foreign investment from Europe, the US or Asia into Bahrain real estate market, however, is on the rise.

In Bahrain real estate new projects are mushrooming, as Osama Al Khaja , Head of Industrial Projects and Chairman of Baytik Industrial Oasis at Kuwait Finance House in Manama, tells us:

“Two years ago we launched Baytik Industrial Oasis which is a development company focusing on the development of industrial parks and industrial zones. The first project (a park) started with 170,000 square feet to add to the infrastructure as a comprehensive package.

Phase one of the park will be ready for operation in September, 2009. The total cost for phase one is around 34 million dollars and these are only direct costs, however, we anticipate this park to attract investments of around 200 million dollars.”

Aaref Hejres, CEO of Diyar Al Muharraq, sees his job in upgrading Bahrain’s profile as a beach and diving destination.

“We are going to do this with 40 kilometers of beach front and water front open to the public that we created for the city by going 10 steps beyond what is already available in Bahrain,”

Mr. Hejres says. He hopes to build a sort of ‘city in the city’ on the northern ‘airport-island’ Al Muharraq. Mr. Hejres:

“We are creating a city for all strata of people who are socially driven. There is something for everybody. Whether children, young men, or old men, there is something for you there. Something that may not ever have been offered in Bahrain or maybe anywhere in the world, will be there too. You have all of the amenities that make you not want to leave the City and it has a high standard.”

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Tourist are looking for pleasure, and the more pleasure and safety they find, the higher are the chances that they will eventually buy a flat in their favorite destination.

Stephen Rothel, Managing Director of Al Areen Holding Company, says that his water theme park ‘Lost Paradise of Dimun’ be high on traveler’s agendas:

“This type of water park has become a GCC destination. Tourists will come to enjoy the facility, and there are hotels that they can stay at rather than just coming for one morning. The water park has strong appeal GCC-wide, which again helps attract the tourism dollar which is important for the economy.”
The economic downturn, he states, did not affect Al Areen dramatically.

Stephen Rothel: ”We’ve got two million square meters of land, and we’re in the fortunate position that 97% of our land has been already sold.“

The Durrat Al Bahrain has become a well-known model at real estate exhibitions worldwide.

Durrat Al Bahrain is a villa complex on artificial islands, which were created by land reclamation.

Another master plan being realized at the moment in Bahrain real estate is Bahrain Bay, strategically located at the shore of the Diplomatic Area. On the Bahrain Bay homepage the following vision is promised:

“The vision of Bahrain Bay is to create a vibrant and authentic metropolis inspiring opportunity, shared responsibility, and a legacy for the Kingdom of Bahrain. We will achieve this by creating a place whose very essence is a fusion between the calm of water and the vitality of an urban centre, celebrating a very Bahrainian tradition — the coming together of water and city.”

In the opinion of Bahrain Bay’s CEO Bob Vincent , the smallest GCC state is not a place for speculators:

“Bahrain real estate has evolved over many years (30-40 years) as the gateway for business development and opportunities in the Middle East. Because of that long term evolution and the growth and diversification of interests, it has developed a sustainable economic footprint.

Bahrain real estate market has responded to that aggressively in the last five years, up until the middle of 2008.”

Everybody in the construction sector and in Bahrain real estate sector agrees, that the time to ride the green wave is more than ripe. Aaref Hejres sums up his firm’s contribution:

“Our project has been voted one of the best environmentally conscious projects in Bahrain real estate. The procedures and measures we have taken are innovative and have not been done before.

We work very closely with the United Nations in relation to the environmental aspect of the project and we have deliver 200% of what was expected from us from the Government of Bahrain.

No doubt, the iconic twin towers at the Bahrain Financial Harbour and the Bahrain World Trade Centre (BWTC) are not the last eye-catchers in the Kingdom.

 

tags: Bahrain real estate, Bahrain constructio, real estate market