Dilmun rising

The kingdom has been the stage for one of the most ambitious developments to date, with the Marina Yacht Club getting critical acclaim for its unique design.

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Those who have been to Bahrain on business trips may have noticed this name from the airport's Business Lounge: "Dilmun!" But few might know that this links with a Bronze Age civilization called Dilmun that existed in Bahrain over 5000 years ago. The name means "the place where the sun rises" and describes its prosperity from trade links between Mesopotamia and the Indus Valley.

Today, this small kingdom, often overlooked with contrast of Dubai's booming economy and popular real estate market, is again emerging in the international spotlight. With a number of mega projects in the pipeline, Bahrain is about to be reborn into a hyper modern and luxurious property market in only next few years.

Booming economy as backbone

The Kingdom of Bahrain, a borderless island country located in the Persian Gulf is the smallest Arab nation. Nevertheless, is has an economy that is considered to be fastest growing in the region as well as the freest. Since HH King Hamad Bin Isa Al Khalifa came to power in 2002, Bahrain has been making astonishing progress both in terms of economy and politics. With an effort to diversify its economy from oil, Bahrain has established a strong financial centre, attracting nearly 380 financial institutions, making Dubai desperate to catch up after its launch of DIFC.

In the arena of International politics, the Kingdom has secured a position by establishing strong alliances with the likes of the US and UK. The Kingdom has signed a free trade agreement (FTA) with the United States. Internally, Bahrain has been promoting democracy by holding open elections since 2006; even the first female representative was elected to join the parliament before any other GCC country.

The kingdom has been focusing on five sectors, namely financial services, information technology, healthcare & education, tourism and telecommunications. Together with its open economy policy, business transparency, attractive legislation system and lucrative location as a neighbour to Saudi Arabia, the kingdom has been successful in attracting multinational companies to establish bases and headquarters to increase employment and expatriates.

In 2005 Bahrain recorded the highest nominal Gross Domestic Product (GDP) growth in its history of 19.7%. This was driven by an improved performance in two sectors; finance and most importantly, the real estate/development/construction sector. Like Dubai, Bahrain's real estate boom is driven by the nations increasing wealth generated by sector-focused economic policy and population growth. This is mainly driven by expatriate inflow. Unlike Dubai, Bahrain has enjoyed the benefit of its big neighbour Saudi Arabia.

The largest economy in the Middle East, Saudi Arabia is a crucial market for many multinational companies although, due to its conservative nature, many Westerners working in Saudi tend to choose Bahrain as their home. For many, commuting from a more liberalised and tolerant Bahrain and using the 25km causeway to Saudi Arabia has made better sense. The King Fahd causeway has been a driving force in adding demands to the Bahrain real estate market.

Variety of investors

These combined have resulted in a thriving rental real estate sector forming a small but established real estate market. Besides the expatriate community, Bahrain has been a lucrative market for its neighbours. Traditionally, Saudi Arabian investors bought properties when their kids went to Bahrain for education. Qatari investors joined the move for its geographical closeness. The two nations are currently in the process of constructing what will be the largest global fixed link relationship, the "Qatar-Bahrain Friendship Bridge" will only encourage many more Qataris to invest in Bahrain.

However, what Bahrain is now observing is beyond the original scope of property market. Presently, the market is going through a dynamic phase, involving investors globally - way beyond GCC arena.

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