Bahrain's government to oversee stalled projects
New property laws also set to be introduced in a bid to drive investor confidence in troubled market
The consultancy said that in February Bahrain began enforcing the registration of tenancy agreements, which is the first time that the rights of tenants and landlords have been formalised in writing. Moreover, it has added a requirement that developers must obtain a licence before submitting a planning application for a project and is expected to soon require registration of all off-plan property sales.
Cluttons argues that these changes are occurring at a time of increasing national stability and as both residential and commercial property markets in Bahrain improve.
Cluttons' head of Bahrain and Saudi Arabia, Harry Goodson-Wickes, said: “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.
“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.”
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.
Cluttons’ international research and business development manager, Faisal Durrani, 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% each quarter for the past 18 months or so."
He added that Bahrain is a market that "is starting to find its feet again”.
Durrani concluded: “The stalled projects listed by the special committee, that have been ear marked 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. The decisive announcement to now complete some of the stalled landmark schemes sends out a clear message to the international investment community.”