The chief executive of the US$2.5 billion Bahrain Bay development insists the 10 year-old project is moving forward, stating that four schemes were in the latter stages of pre-construction and would start within the next year.
“Two of them have reached the final stages of municipal approvals, and two of them are in advanced design stages,” Gagan Suri said.
He added that if developer Bin Faqeeh starts work on all three plots it acquired in September last year for its Water Bay project on the site, “we will hit a target of 50 per cent of vertical development within the next 24 months, which would be fantastic”.
Bahrain Bay is a reclaimed island of 430,000 square metres linked by road bridges to the capital Manama’s diplomatic quarter. Between 50 and 60 per cent of the plots on the site were sold before the 2008 financial crisis, and the project has struggled to gain momentum since.
Only four projects have been developed thus far, or about 18 per cent of the total land bank. These include a Four Seasons Hotel, headquarters buildings for financial institutions Al Baraka Bank and Arcapita, and the CIH Tower.
Many developers who bought plots before the market crash have left them empty as the prices paid for these made development at subsequently lower pricesunfeasible.
The four new projects include a local headquarters building for insurance company Axa, a twin-towered 250-unit residential complex by Kuwaiti developer Wafra known as Bahrain Breeze and two as yet unnamed towers containing slightly smaller apartments being developed by members of the local Kooheji business family.
Bin Faqeeh is building about 300 units within three 10-storey buildings at its Water Bay project, and Mr Suri said the first of these buildings sold out within days of its launch.
He said that as master developer, Bahrain Bay was trying to work with developers who are holding on to plots to encourage them to bring them to market. It is developing public interest and bringing events to the site, including an Iron Man contest and the kingdom’s national day celebrations, which take place on December 16.
“It’s very, very difficult to push third-party developers,” Mr Suri said.
“Technically, most of them are in default. If we want to be tough, we can go to the extreme of going to court to take land back, but we don’t want to do that. What is the point? We know the economy has slowed down, so it’s better to work with them.”
He said it had taken a flexible approach to development, to the extent that it allowed Bin Faqeeh to take on the land and pay for it in stages so that it could start sales sooner to help raise funds for Water Bay’s development.
“We did a risk assessment and we said ‘yes’. These are the kind of things we are doing to help. Because these are big plots. There is a lot of money. We are being very accommodating and that is the best we can do.”
Harry Goodson-Wickes, the head of the Bahrain office for consultancy Cluttons, said Bahrain Bay is a project that “has struggled in the past”, but has good long-term potential and could eventually become Manama’s central business district.
He said the opening of the Avenues Mall next year will help to bring more traffic to the site, as would the completion of residential units.
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