By Staff writer
Cluttons says move will 'significantly bolster investor confidence' in Bahrain's real estate sector
A decision by the Bahrain government to oversee the completion of stalled real estate residential projects is likely to "significantly bolster investor confidence" in the Gulf kingdom, according to Cluttons.
The move comes on the back of the decision last month to formalise the rights of tenants and landlords through the introduction of a formal tenancy registration process, along with new legislation around the development of new real estate schemes.
In February, the government began enforcing the registration of tenancy agreements, marking the first time the rights of tenants and landlords have been formalised in writing.
Additionally, the new requirement for developers to obtain a licence prior to seeking planning approval and an anticipated ruling on the formal registration of all off plan property sales are adding to the confidence boosting measures being spearheaded by the government, said Cluttons.
“This is certainly another very positive step in the right direction. The government’s actions will no doubt translate into increased confidence levels and heightened investor interest, which will directly benefit headline projects such as Dragon City and The Courtyard," said Cluttons in a statement.
It added: “While it is unclear how the stalled residential projects have been selected, projects such as the iconic Villamar development in Bahrain Financial Harbour are being tackled through the engagement of Gulf Finance House and Saudi based Al Rajhi Bank, we can see that there is strong underlying commitment from the authorities to those who are heavily invested in projects that have been on hold for a number of years.”
Cluttons said a further nine residential projects are expected to see a resumption in work this year, with Amwaj Gateway Towers, Marina West and Riffa Views all earmarked for completion.
Faisal Durrani, Cluttons’ international research and business development manager, added: “The government’s intentions are clear and the timing is near perfect. Bahrain’s residential market is enjoying a period of exceptional stability, with rental value growth coming in at roughly 1-1.5 percent each quarter for the past 18 months or so.
"From an investors’ perspective, the stability has a tremendous draw, particularly in a market that is starting to find its feet again.”
Durrani said: “The stalled projects listed by the special committee, that have been earmarked to be pushed over the finish line, have been lying dormant, tantalisingly close to completion, for a number of years.
"Not only have these served as a constant reminder of the recent challenges faced by the real estate market across Bahrain, but they have been a source of financial distress for both domestic and international investors.”
Hopefully someone will be checking to see if these projects are still structurally sound. There is a reason why it is illegal to half finish concrete towers and leave them exposed to the elements for 6-7 years in most parts of the world. Sadly, the opportunity is lost for many investors.
A good move for the Bahrain Government.