Creating New Boundaries
With the global financial crisis the rate of the real estate development has slowed down around the world and Bahrain is no different or immune. The financial crisis has hit everybody and the banker’s reluctance to lend to the real estate market has been almost like a disease. Some of the landmark real estate developments of the country experienced a slowdown in their plans but works in Bahrain continued despite the adversities that particularly hit the country political scene over the past two years. “During the rough times of the financial crises the cranes at Bahrain Bay never stopped. It shows the resilience, the commitment, and the financial strength of the investors that are backing un the Bahrain Bay project”, Robert Lee CEO of one of the leading real estate development in Bahrain, Bahrain Bay told GGC.
Prime real estate developments in the island will soon transform the country’s landscape as both, a business hub and a tourism destination. In Manama a new business and commercial district has been created while expanding north-west towards the airport and into Muharraq Amwaj, already considered an island of tranquility and preferred expat location until recently. The fact that it is 30 minutes away from Manama is becoming more popular. However, Amwaj location will be favoured with the creation of entire new communities in nearby Muharraq island that include Diyar, a mix-use development that caters to mid income residents and Dilmunia Health Island, more of a tourism city that caters to the growing international market of health tourism but also features a residential and commercial development.
Downtown Manama expansion
A new Manama is blossoming along the
highway that comes from Saudi Arabia into Manama City and off to the airport. Expanding on the back of new reclaimed land, a new city landscape has been shaped with top-scale corporate, commercial
and residential developments that cater to the high-end market. Bahrain Financial Harbour Area, Reef Island and Bahrain Bay, located within 5 minutes drive from each other, are setting the new
boundaries of Manama city. Bahrain Bay is tasked with the development and operation of a $2.5 billion corporate spot built a total land area of 450,000 sqm in reclaimed land as an extension of
downtown Manama. The development houses the new Arcapita HQ building, the Four Seasons, JW Marriot and Wyndham hotels and Al Baraka Group headquarter among other renowned tenants. Works are
expected to finalize by 2015. “It will be the place for head offices and corporate offices and 5 star hotels and apartments associated with the premium destination. It is also a major cross
connection between the causeway to Saudi and Bahrain International Airport. We will be the focal point and we will be the destination”, Lee said. The Harbour district covers 380,000 square metres of prime waterfront property catering to a high-end
client with premium office, retail and residential spaces. Reef Island has promoted itself as “an island of bliss in the heart of the city” and it truly has become one. It offers easy access to a bustling cosmopolitan city complimented with the tranquillity of a tropical island getaway. The 579,000m² master planned, freehold communities was
conceived as Bahrain's benchmark of luxury living on a purpose-built atoll. It comprises of 39 residential buildings with a total of 1217 apartments, 1 residential Icon Tower, 49 stylish chalets, and
65 luxurious individual villas all overlooking private lagoons, with a private Marina & Yacht Club.
Revival of the ancient Capital
Several real estate developments around area are expanding the city Northeast into Muharraq Island, once the capital of Bahrain. New communities are coming up around some of the most recent infrastructure developments as the new King Salman bin Khalifa Port and close to the airport. Mixed-use real estate projects such as Amwaj and upcoming Dilmunia Health Island and Diyar are also located there. Amwaj was the first mix-use community project in reclaimed land in Bahrain. The project was approved in 2000 by the Government and by 2006 the first tenants started to move in. Amwaj Islands is a development built on a vision of returning waterside living to the people of Bahrain and combine residential, commercial and retail space in a 4sq km community situated off the coast of Bahrain near Muharraq and just 15 minutes from the capital, Manama. New landmark developments around the ancient capital of Bahrain, Muharraq, are Dilmunia Health Island, developed by Ithmaar Development Company and Diyar Al Muharraq. Diyar Al Muharraq is a master planned city built as an extension of the island of Muharraq. Over an area of 12 square kilometres, “the development is a cohesive mix of residential and commercial properties within affordable price brackets aiming to open up new opportunities for the part of the society previously excluded from home ownership”, Aaref Hejres, managing director of Diyar told GGC. The urban development’s anticipated total investment value is US$ 3.2 billion with Kuwait Finance House (KFH) at the backbone of the financial support. Location plays also a key factor in the development as it is close to major commercial and industrial ventures (Bahrain International Airport, Khalifa bin Salman port in Hidd and the Bahrain Investment Wharf) and half an hour away of Manama. The project aims to accommodate over 100,000 people, creating a new tourism destination and fostering an immense contribution to the economy as a whole. In 2012, Diyar Homes was inaugurated and Dragon City, the first Chinese themed retail-shopping mall, was announced. Situated on the northern shores of Muharraq, its amenities will include over 40 kilometres of waterfront with sandy beaches, marinas and all the basic elements surrounding a community such as schools, medical facilities and commercial outlets like shopping malls, banks, and hotels.
Tapping into tourism developments
Also in Muharraq, a new city is growing under the brand name of Dilmunia Health Island. With this project Ithmaar Development Company aims to increase Bahrain´s potential to become one of the main health tourism destinations of the Arab world. The $1.6bn development tendered its first infrastructure development phase in the middle of the crisis and plans to handover the first units by 2014. Dilmunia expects to attract a number of health and wellness amenities. Located off the northeast coast of Muharraq It is a 125 hectares manmade island with a 2.2km long Grand Canal that offers mixed-use land and is expected to provide housing to approximately 15,000 residents. Close to Bahrain International Circuit (BIC) and taking advantage of it a new project real estate development project is transforming the desert location into an oasis. The $1 billion Al Areen development is spread over an area of 2 million square metres and includes residential villas, hotels and spas such as Al Areen Desert Spa and Resort and commercial outlets and recreational facilities such as “The Lost Paradise of Dilmun” Water Park. Adjacent to the Bahrain International Circuit (BIC), the Al Areen Holding Company was established in July 2004 Al Areen Holding is a joint stock closed company owned mainly by the government of Bahrain and Gulf Finance House.
New market equilibrium
Some kind of equilibrium is gaining momentum and banks, developers and buyers are more cautious seeking for the right value in every product. “Who knows -Robert Lee CEO of one of the leading real estate developments in Bahrain, Bahrain Bay, told GGC- the real estate market might make a come back because in this part of the world people don’t like the equity market”. In this part of the world there has never been a real estate market but rather a commodity market using real estate as the commodity, agreed Christopher Sims, former CEO of Naseej a development company that caters to the growing need of affordable housing in the region”. Another market characteristic is the common dislike of purchasing off-plan properties.
Affordable Housing demands
According to some analysts, there is a shortfall of around 50,000 units of affordable houses and the problem is chronic. Housing was one of the demands of the social uprisings that started in Bahrain in 2011 in the wake of the Arab Spring. The government announced at the time that it will allocate the necessary resources on social housing projects and suggested that funds will also come from the $10bn GCC Marshall Financial Support Fund. Social housing is currently feeding the growth of the average developer of Bahrain as high land prices and high financial costs are preventing new private investments on affordable housing units in Bahrain even though it is one of the key elements for social stability. The government decision to undertake private public partnerships (PPP) to meet demand is set to reduce quicker the housing needs of the market that nevertheless will continue to put pressure on government expenditure in the long run. The first PPP agreement to build more than 4,000 affordable homes units and deliver them by 2016 was signed in January 2012 by the Ministry of Housing of Bahrain and the real estate and infrastructure development company, Naseej. Later in the year, the government announced a five-year strategic housing strategy that plans to spend $5.59bn in the construction of 50,000 houses.
Our latest investment report on Kuwait was recently published in one of the leading Spanish dailies, ABC. FindMe in Kuwait explores the economic perspectives of Kuwait and the country´s future plans to compete with its fast developing neighbours. Once the leading country of the Gulf, Kuwait has remained silent for the past decade. And although many would like to see faster changes, Kuwait is moving, at its pace, to them. Inexorably. Learn about who is who in Kuwait and read what the leaders say about their own future in our upcoming release: FindMe in Kuwait Mobile app.
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Global Gulf Consulting has concluded its latest production on Bahrain, FindMe in Bahrain giving the country a fresh approach after a couple of difficult years of local demonstrations that matched the global recession. Bahrain is a small island in the Arabian Gulf with an incredible potential for logistics, industries and tourism. FindMe in Bahrain was supported by both the public and private sector of Bahrain. Banagas, Nass Corporation, BBK and DHL were GGC strategic partners in the development of the series among others.
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