MANAMA, Bahrain: With Saudi Arabia a short 40-minute drive from Bahrain, across one of the world’s technological wonders, the small island nation has proven itself to be a real estate agents’ haven. With no income tax and government protection against a rapidly falling dollar, Bahrain has marched itself quietly into the second leading market in the region behind Dubai. It’s a good time to be a real estate agent in Bahrain. Prices are skyrocketing and an influx of investors made one such investor exclaim that it reminded him of “the Las Vegas real estate boom three years ago.†In 2007, land prices doubled and are continuing to rise, making the country an ideal investment spot. For those hoping to invest, the opportunities seem endless. A typical condo starts as low as $300,000 and a large number of these will be ready for occupancy by the end of this year. Agents talk about investing in land, which continues to appreciate in the country due to the government’s policies. Most analysts argue that this is currently the best time to buy land as spaces will become very limited in the near future and prices will continue to rise. Another route that many international investors are taking is a partnership in larger projects with local developers. These grand projects are expected to yield at least a 70 percent profit by the end of this year. Bahrain, for the first time in its history, breached the Global Real Estate Transparency Index, signaling its position as a member of the global real estate community. The Index rated Bahrain, along with fellow Gulf nation Abu Dhabi, as “semi-transparent.†Obviously, this goes a long way with foreign investors who want to see optimal returns. And with high inflation rates across the region soaring, Bahrain’s relatively low prices have begun to see the fruition of foreign companies relocating to the small island. Expatriates are also seeing the country as a spot to settle down, especially those who cannot afford to live in Dubai but still desire to situate themselves in the middle of the oil boom. Ongoing & Future Projects in the country Optimism is abounding, but what is happening on the ground? Ithmaar Development Company (IDC) recently announced its platinum sponsorship of a top property exhibition. The project was finalized by the company’s chief executive officer Mohamed Khalil Al Sayed and Bahrain Stock Exchange President, Majeed Al Gassab. The showcasing of IDC’s projects across the country is highlighted by their $1.6 million Dilmunia health island, which is set to transform the kingdom’s coastline and other visitors state-of-the-art heatlh and wellness facilities in what is being touted a “resort-style environment.†“We are extremely pleased to partner with Bipex this year,” said Mr. Al sayed in a statement to reporters. “Bipex has been able to successfully showcase the region's many landmark real estate developments and infrastructure projects and has grown in prominence in the five short years since its inception to become Bahrain's largest and most important real estate exhibition.†As one of Bahrain’s leading development companies, IDC is also optimistic over a number of other projects, including the $3.3 billion development portfolio that includes the health island as well as a $1.5 billion Al Jazayer Beach Resort and the $175 million office tower and family-oriented hotel development to be constructed in the Seef District of Manama. What makes this partnership so important is Bipex itself, an organization developed and sustained by the Bahrain Society of Engineers (BSE) and is held under the patronage of Sheikh Khalid bin Abdullah Al Khalifa. The role of the government cannot be underestimated in the promotion and continued success of the industry in Bahrain and due to the number of projects currently underway, analysts are confident that the country is on firm ground for years ahead. One of the main difficulties being had in Bahrain is the necessity to maintain low prices in order to attract business from other regional centers, namely Dubai. A number of large “mega-projects†currently underway aim at doing just that. These projects include the Bahrain Bay, Durrat Al Bahrain, Bahrain Investment Wharf, Amwaj Islands, Reef Island, Bahrain Financial Harbor, Bahrain World Trade Center, Al Areen and dozens of others. There is much hope that when these projects are completed, Bahrain will once more attract the region’s leaders, which have for the past few decades called Dubai home. Bahrain has prided itself on being the regional hub for business dating back thousands of years as a result of its proximity and accessibility to neighboring countries. Some of the drawbacks Inevitably, all cannot be perfect, even for a sector that has seen enormous growth in this decade alone. One of those major challenges facing development is the inability to hire well-trained local labor. The government has been accommodating in this manner by reducing the sector’s “Bahrainization†target from 20 percent to 10 in an effort to bolster companies abilities to hire more foreign workers. This is increasingly important due to Bahrain’s small size. The second, and arguably more important, issue is the importing of construction materials on a large scale to support the massive projects being undertaken. High import taxes on supplies have forces some firms to suspend construction on projects already being worked on, much less start new projects. This has made prices increase in comparison to other Middle Eastern nations. Despite these few obstacles that must be overcome in years to come, the prospects for Bahrain is high, as local and foreign contractors have already begun to put nail to the board as witnessed by the glamorous skyline that lines Manama. BM
