By Soren Billing
Report says Gulf state has 'tremendous' potential for property investors.
There are significant opportunities for investors in Bahrain’s commercial real estate sector, but the market is being held back by construction delays and problems with traffic access, CB Richard Ellis said on Monday.
The building of the causeway between Bahrain and Qatar will link the two wealthiest nations in the GCC with Bahrain sandwiched in the middle, and could lead to “tremendous” development opportunities, the real estate consultancy said.
“Regional and multinational firms will in future be able to set up in Bahrain and serve these two major markets from one central location,” said Mike Williams, senior director of CBRE Middle East.
The recent oil boom has resulted in increased economic activity in Saudi Arabia’s Eastern Province and is transforming the cities of Khobar and Dammam, he noted.
Bahrain is the preferred location for expatriates working in the three countries due to its affordability and more relaxed lifestyle.
But problems with traffic and access to Bahrain’s Central Business District need to be resolved, and purpose built office accommodation completed in the emerging office districts, before investment opportunities can be gauged accurately, CBRE said.
“The construction industry in Bahrain is very non-transparent and there are problems with developers struggling with cash-flow, which is then passed on to contractors,” Williams said.
“The pace of development may well slow down across the kingdom but it is still happening and as we emerge from this difficult economic period, we may find the industry to be leaner and healthier than it was before.”
No mention here then of the rabbit hutches being built in droves for which the developers want the price of a mansion!
The Manama CBD traffic will ease only after the north Manama causeway is built and then the underpass in front of Bahrain Financial Harbour towers are built. Recently there was a statement from the government that these projects have been postponed due to financial difficulties. When this delay is considered along with the long durations required to build any project in Bahrain, it is realistic to expect these projects to be ready for use only after 10 years. The proposed Metro is still further away. So brace for traffic congestion for the next 10 years. Further, sudden Real Estate growth may be good for Real Estate agents but is not necessarly good for the population. Because this causes rents to rise sharply and generally make life unaffordable and difficult. Even without such growth, all stuff in any supermarket in Bahrain is 25% more expensive than UAE.