As Bahrain heads to become the logistics hub for the Gulf Region, due to its strategic location and proximity to the Kingdom of Saudi Arabia, the biggest market of the Middle East, warehouse space has become one of the key growing sectors of the economy. With this in mind, First Bahrain developed a model to fill the gap in the sector: SME´s warehousing.
Q. What is First Bahrain?
A. First Bahrain Real Estate Development Company is an innovative regional real estate developer established in Kuwait in October 2004. The organisation has a paid up capital of KD 31.5 million. Dedicated to achieving sustainable returns through collaborative relationships, First Bahrain creates enduring value for all stakeholders with a demand-driven investment approach. Operating out of Bahrain and Kuwait, First Bahrain is strategically positioned to execute projects across the GCC, in accordance with the principles of Sharia.
Q. And the one sector you decided to go in with your first project was industrial warehousing with the creation of Majaal. Could you please tell us more about Majaal and the new developments of it?
A. Majaal is a SME focused grade A 12,000 sqm of warehousing facilities and an industrial workspace development. The reason we decided to develop Majaal was that the well established companies would build and manage their own warehouses but the small and medium enterprises don’t normally have the resources to build their own. Instead they would occupy sub-standard warehouses and in some cases even turning villas into storage facilities. Majaal was the first to fill this market gap in the Kingdom of Bahrain and the region as most of them are 3PL (Third Party Logistics).
So we decided to set up an SME´s warehousing facility located at Bahrain Investment Warf (BIW), a mixed-use industrial, logistics and commercial development that covers 170 hectares in the newly designated Salman Industrial City. The location was perfect to us as it has easy access to the Bahrain International Airport, to Khalifa bin Salman Port to the Saudi King Fahd causeway and to the newly planned Friendship causeway between Bahrain & Qatar, in addition to its close proximity to the capital, Manama.
Q. Location plays always a strategic choice when taking business decisions, but what are the competitive advantages that Majaal offers to the tenants?
A. Definitely, our competitive edge is that our warehousing units start from 250m2, an area that is convenient for the storage needs of small companies, specially the light manufacturing, though our facility houses all kinds of tenants.
Q. As we understand, the project has three phases each of them of the same size. How many tenants would you expect for each phase?
A. Phase one was fully leased out in a matter of months of operations encompassing 20 tenants. Now we could double that in phase two and triple it in phase three.
Q. What kind of tenants are you looking at?
A. We have a variety of companies that either use the facility for storage or as a premises for their production activities. A sample of the phase one tenants would be a hair and beauty products company, a bank, a pharmacy, etc. The advantage of being a tenant at Majaal, is that spaces can be tailor-made based on tenants requirements. We provide a number of different value-added services beyond the space, including 24/7 security, state-of-the-art Information and Communication Technology (ICT), assistance with fit-out works, and leasable materials-handling equipment such as forklift trucks. We can also do shelving, cold storage, air-conditioning; we can build a mezzanine office for the accountants, etc… The facilities have fibre optic WI-FI enabled; our flooring is super-flat, with firewalls and CCTV cameras.
Q. Majaal phase two was put on hold due to the country’s uprising but is now back on track. What is the foreseen investment and how many tenants will you be expecting to come in line?
A. Our investment in phase one was about US$20 million and we are investing almost the same in our second phase.
The new buildings will double the leasable area to a total of over 250,000 square feet. With 20 existing tenants, the new buildings, identical to the existing facilities, will be configured to accommodate up to an additional 40 tenants, with unit sizes ranging from 2,700 square feet up to 43,000 square feet.
Q. What is the long-term strategy of First Bahrain, and Majaal?
Our long-term plan has always been to create a brand that we can franchise across the region and Saudi Arabia is our next step. We have finalised our study with Ernst & Young to analyse the market and start our venture in Saudi Arabia.
We have developed a product that succeeded well in the Bahrain market. The Saudi market is a much bigger market where a medium size company might be equal to a very big company in Bahrain. However, it will be industrial and focused on the smaller sector of the economy.
Q. What other projects does First Bahrain have apart from Majaal?
We have 20,000 sqm of land in Janabiya, a very upscale residential area very close to the Saudi border where we are looking to develop a sports complex on it. Almost 60 percent of the population in Bahrain is young, 18 years old and below.
CV Amin Al Arrayed
Amin Al Arrayed has over 15 years of extensive experience in banking and finance and has held various senior management positions, including Senior Manager of the Retail Banking Division at BBK (Bank of Bahrain and Kuwait) and Head of Retail and Placement at Real Estate Finance Company (Reef) in Bahrain. In 2001 Amin also held the title of Superintendent of Domestic Affairs for the Central Bank of Bahrain (CBB) formerly Bahrain Monetary Agency (BMA), during which time he was seconded to Washington DC, where he assisted in the development of a macroeconomic framework for Bahrain and initiated a comparative study of monetary and exchange rate policy issues in GCC countries. Amin currently leads the dynamic, entrepreneurial and growing First Bahrain team since 2007, as the founding General Manager of it and the Managing Director of Majaal Warehouse company that is fully owned by First Bahrain.
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.
FindMe in Bahrain is available at the local bookstores Jashamal and online as well as in the Apple Store. It is a full business leisure and business guide for any investor or visitor interested in traveling to Bahrain or for those that already live there.
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