Under Vision 2030, the King of Bahrain is looking to transform the country into a world-class competitive, sustainable, diversified and knowledge-driven economy. Education, infrastructure, foreign investment, youth employment and technology are leading the King’s agenda. Where do you think V-2030 is taking the country and what is the role of the real estate and construction sector in this holistic framework?
His Majesty the King has directed that the growth and developmental plans of Bahrain come under a framework that gives direction and a schedule for long and short-term planning. A great number of sectors come under the umbrella of this Vision 2030 with education, infrastructure, foreign investment, real estate, tourism, and technology amongst the foremost. Each is linked to the other and improvements in one area slip over and benefit others, ultimately benefitting the citizens of the country, improving living conditions and standards and providing employment opportunities.
With the Government focused largely on public welfare, and a great deal of effort put into the development of adequate and affordable housing, sound education and increased safety and security measures, the private sector has contributed on a complementary and increasingly significant role in helping the Vision to stay on course.
Real Estate in Bahrain has behaved more or less in the same manner that it does in any country world over. With the real estate boom, high-rise buildings began to sprout up everywhere, but after this high-energy start, the financial crisis took place and many projects were put on hold. In Bahrain, however, there is a strategy that has helped to make things work, and helped us weather the crisis. Besides the fact that the strategy takes into consideration other factors besides the investment aspect, in Bahrain since investment banks back most investment organisations, we have the advantage of mitigated risk. Our financial institutions advise caution rather than rashly and impulsively getting into something. There is a plan which looks at whether the project will be in line with market demand and supply in the country, looks at the long and short-term, and provides a clear picture of how the market behaves and what it looks like and a projection of what it will look like.
In the past, there was a great deal of fluctuation of prices, but with greater stability now and real estate development going in the right direction, things are looking up. Of course, it is necessary to work in alignment with the government, within the prescribed parameters with the result that we are concentrating first and foremost on the needs of the Bahrainis. By addressing what is needed, other corresponding things such as services, offices and accommodation for workers will be backed automatically. That in turn creates a spill over effect in all other sectors, such as the construction sector, services, maintenance, cleaning, security etc.
I think Bahrain is right on target with its vision, and we are confident that all sectors will work as one towards achieving our goals.
In regards to real estate, one always talks about the big names that are financing the construction and that keep track of the financial health of the companies. However, who finances the buyers to access a home is just as important. What is your evaluation of the mortgage market?
Certainly, home loans are critical to homeowners, and those institutions that are providing the service are very important. But again, emphasis comes back to having the right plan. Because of the regulations and laws of Bahrain and the CBB (Central Bank of Bahrain), not everybody who is trying to get a loan, without taking the debt to equity ratio into account, can do so. It is very easy to get a loan for your project if you have the right financial model and therefore your loan is dependent on what you can pay off. The client or end-user, can easily obtain financing to buy a house or apartment if the project is guaranteed. If you manage all factors well and cover all risks, there is no difficulty in Bahrain to obtain financing.
The government is also playing an important role in helping the Bahrainis who need affordable housing with different financial schemes. How does that resonate in the real estate sector?
The Ministry of Housing has had housing bank schemes for a very long time – since the early 1970s in fact. They give loans for purchasing housing, as well as itself, providing housing for Bahrainis. Today the waiting list of people who need homes and who have applied to the government for support has become longer with reports claiming that there are more than 50,000 on the waiting list. The government is trying to reduce this number by initiating many new urbanization projects. Without assistance from the private sector, however they will not be able to shoulder the challenge entirely. This is where we come in, upping our efforts and working in coordination to support the government in meeting this huge demand for affordable and social housing.
At the end of the day, the market need ensures that the profit margin is attractive and the real estate industry sustainable. Many private companies come into play because there is a guaranteed and strong market for affordable properties, and a clear commitment of support from the Ministry of Housing.
Under the guidance and direction of His Majesty, the government is working to ensure that Bahrainis to have a sustainable lifestyle, which goes on then to address other needs such as education, and job opportunities. We believe that sustainability is not just about sustainable housing – it is also about the maintenance of lifestyle of the citizens here in Bahrain.
How did the vision emerge?
It began with a group of Bahraini investors engaging in a joint venture and deciding to develop a big project. There were a lot of ideas at the time but we it narrowed down deciding finally to build using elements of Bahraini design. We wanted to keep intact elements of our tradition and so you can see here in DIYAR AL MUHARRAQ elements and patterns from the old architectural and interior styles, with features like the central courtyard.
We wanted to hold onto that feeling of history and belonging and create that concept which felt natural and comfortable for the people of this country. For most Bahrainis their history and culture is very important and we felt that we should do everything to help them hold on to that.
Bahrainis have been very involved in this project contributing to creating that intrinsic feel on many levels. When we decided to go for this style of architecture and design, we felt we were tapping into an essential part of our culture that would make any Bahraini happier and more comfortable in his home.
Later on, what inspired the team to go forward and put up such an ambitious and well-managed project?
First of all, because the project is huge, when you look at it from a purely business perspective, you will think that building a very dense project is the way to go, that building vertically with high rises will ensure profit and benefit.
Our vision was different however – we wanted to have a good mixed-use, community-oriented city/ development, with a great lifestyle and all services, so that everything will be available and reachable right here and people will not need to go out of their way to find what they need. Schools, universities, medical complexes, hospitals, entertainment, shopping centres, beaches and amenities are all here in a holistic mix that is quite unique in scale and scope.
We also maintained the fact that land reclamation need not be seen as something negative. If done responsibly, using the proper checks and balances and using the best that technology and science can provide, we are only increasing the country’s infrastructure and facilities, and boosting the economy.
Bahrain is small, and therefore to accommodate the density of population in some areas, we have to create more waterfronts, more facilities and build in a community-oriented way, while all the time ensuring that our natural resources are not depleted or affected.
The soil in the middle and lower parts of the country is very hard to build on, because of the terrain and the non-urban economic activity. How to redefine urban life having this in mind?
The south is still mostly an oil and gas area, so it is still under investigation for its potential in that direction. This leaves us with a very limited area where you can actually build on, and some limitations in surroundings. One of the biggest requirements is for more green areas and pedestrian areas in Bahrain, but many builders have realised that and so we have many more such projects today, creating a greener landscape within the country. Adding to the effort, the government too is concentrating a great deal on the development of parks, beaches and seafront projects.
While there were several ideas for master plan options using the limitations and strengths of the country, the main goal for DIYAR AL MUHARRAQ was about providing good affordable/social housing, offering better standards of lifestyle, and adding all the services and amenities. We developed a master plan, so that in some areas, you will have a little bit more density, especially around offices, shopping centres and commercial areas. In other areas you can see that it is very low density – mostly housing. We are integrating it with many other attractions, including one such as Dragon City, a unique concept that will add a new element to Bahrain. It is planned as a long-term project and we are happy that it is proceeding to schedule. We are very proud of the fact that we have such a complete and visionary master plan.
Urbanisation is a major concern today but at DIYAR AL MUHARRAQ we have experts in the field, who assess the need and plan every aspect of it. Expected and existing traffic was considered before roads were planned accordingly, taking into consideration the best routes and how people can walk from one area to the other, and how they can reach the beaches and other amenities from their homes. We have a development control plan, which contains guidelines to control accessibility and good urban life, to ensure that the initial vision and the goal for the project are being achieved.
It would not be right to say that DIYAR AL MUHARRAQ provides only affordable housing – it is mixed-use, in every sense of the phrase. The north side will provide more exclusive housing with mid to high-end residences. The people-per-square-metre ratio or efficiency of the project is very low compared to the norm, but it has been an important part of our plan to ensure that we maintain large areas for public use, while keeping certain areas private and exclusive. We planned that each district within our development has its own services. It is not just about building houses in a random and unplanned manner, we have actually put into practise our dictum that when you choose DIYAR AL MUHARRAQ, you choose a lifestyle.
How will DIYAR AL MUHARRAQ work with the local government? Will there be a new local municipality established, or will it be transferred directly to the various ministries in charge to manage the new urban spaces?
We have a technical interface office (TIO), which will coordinate between the government authority and the customers/buyers. They will make sure that everything is controlled – from services, to building regulations, design guidelines etc. The DIYAR AL MUHARRAQ TIO will be ready very soon.
What feedback have you received so far from locals who want to buy homes, and foreign investors who see DIYAR AL MUHARRAQ as an investment opportunity?
We are represented in a lot of exhibitions and campaigns, so people are well aware of DIYAR AL MUHARRAQ and what we do. However more than anything else, there is a lot of public awareness brought about by our dynamic contribution and involvement in the community. Our CSR activities and programmes have gathered a great deal of support and we have engaged actively with the public on many initiatives close to their heart.
At the end of the day, on examining all factors – looking at what DIYAR AL MUHARRAQ has to offer and how we have conducted our business and our responsibilities – I think the response has been overwhelmingly positive. People have been keen to be associated with an organisation that is known for best practices in every sphere.
This positive image set by our community participation and social integration has resulted in an excellent response from investors. Besides our name and reputation, one additional and important selling point has been the location. People like to live at DIYAR AL MUHARRAQ for its beautiful landscape, amenities and closeness to nature, and it then becomes an investment for the future. They are thinking about their children and grandchildren, and what they can leave them as a legacy. A lot of investment packages are being created, and now with reclamation over and the project moving ahead at full pace, we are talking to many investors.
When we visited, we were told that most of the properties were already sold out, and most people knew about the project. They had been talking to each other and spreading the word. Given the strong demand, has there been pressure to speed up the building process?
We have packages with different projects, such as showrooms, offices, resorts, hotels and villas etc. There is a good response from people, and some have wanted more information so that they can look at various options within the development itself. It all depends on what opportunities you put forward for investors. We are not holding back anything, as we want to gain from it and also help others benefit through us. We are happy to welcome organisations and people to work with us on any other project, be it buying the land, or a joint venture with us. We have all kinds of interested parties including people who come forward as contractors for long-term joint ventures.
How is each project presented and targeted differently but still under the same DIYAR AL MUHARRAQ umbrella?
We have different targets for each project. Some investors will invest 1 million, and others will invest 100 million. There are a lot of investors that are interested in investing in this project, but we have the means and a diversity of offering to accommodate them all.
What is your environmental responsibility strategy?
You have a complete community at DIYAR AL MUHARRAQ with every single detail of urban life in consideration while ensuring a holistic and positive lifestyle. To achieve this without compromising any element in quality, scale and scope, we have had to reclaim land and build on that. It is a commonly held belief that there will be undoubted environmental impact from reclamation. However we have not taken this lightly and from the very beginning we have deliberated and planned on how we can mitigate that. Professional consultants from all over the world were brought in to study and suggest ways to lessen the environmental risk and see how we can, in fact improve on what was there.
Different stages like Baseline Environmental Studies, Water Quality Monitoring, Ecological Monitoring, Coastline Monitoring, and Environmental Compensation Plan (ECP) were devised as part of the DIYAR AL MUHARRAQ’s extensive Environmental Management Plan (EMP). A revolutionary online environmental management system called DIANA was implemented here, the first of its kind in the GCC. This system provides automated real-time updates and analysis designed and implemented specifically for DIYAR AL MUHARRAQ.
The project has been monitored from 2006 and continues to be rigorously supervised. Already more than 250 artificial reefs have been placed in the surrounding waters, and plans are in place to do more. The effects of our pre-emptive actions are now being felt. For instance, we have seen a significant increase in the population of fish in the surrounding waters. At every level we have been supervising all work – our contractors are monitored with specialist consultants who can guide us on the right measures. Not content with just leaving it to them, we have in place checks and immediately contact the environmental representatives if we feel there is anything wrong.
Taking our community responsibility seriously, we have dramatically increased Bahrain’s beach areas with more than 40 km of waterfront, of which over 20 km have been assigned for the public use. A harbour for fishermen was developed near the project, accommodating over 150 fishermen free of charge.
All this and many more such CSR projects and environmental programmes initiated at DIYAR AL MUHARRAQ are helping to create a legacy of social, economic and environmental well-being that is working steadily towards a long-term vision for the future of Bahrain. We know that there is an environmental and social impact, and we have taken it upon ourselves to act with responsibility and ensure the best for the people of Bahrain and for our country’s resources.
How do you envisage this place in ten years’ time? Bringing life to an area that was part of the sea is a fascinating concept.
It is not just about having a huge project or making something where there once was just water. I think of it as a process – just like building your own house – you have land, you design the house and you start building it, and then you open the door and live in it – but what holds it together is your vision and your commitment to that dream.
It is important for us to deliver what we promise to people. It is not just a question of trying to sell land or a house – we are delivering a vision, we are turning people’s dreams into a happy reality.
DIYAR AL MUHARRAQ is planned in stages. This morning we started to give away the title deeds for the land, soon we will move on to another stage.
It is my personal dream to see an active productive community here with homes filled with happy families and individuals; to see the beaches and parks used in the best way; and to know that we have made a difference in this country.