Construction & Real Estate

Bahrain: Segmented recovery

Whilst the Bahraini real estate sector may not have suffered the dramatic reversal of form experienced by many property markets across the Gulf, it has seen a fall off in activity, with the volume of sales and new leases down and many expecting a return to the heated conditions of before 2008 to be some time off. Some estimates put the fall in rental prices for high-end residential units at around 10 per cent during 2009, far better than some of its near neighbors, where returns from rental properties have fallen by as much as 50 per cent. Sales prices for some developments in the Gulf such as those in Dubai have plunged at a similar rate. Bahrain has not seen the extensive corrections in general asset prices that occurred in Dubai or elsewhere around the globe but Tim Glover, the Bahrain CEO of real estate specialist Cluttons, said a chance of instability remained. “There is still the potential for an imbalance between supply and demand across many of the real estate sectors and supply in particular will have to be carefully regulated in order to allow for some growth in market transactions,” he said in a report issued February 22. Significantly for the Bahrain property market, the Cluttons report foresaw growth in the industrial segment, thanks to continued state support and new developments coming on-line. If correct, this trend could result in spillover to the residential and possibly office or retail segments, driven by the need to house employees and provide workspaces and sales sites. (Source: OBG)

UAE’s Deyaar postpones US$136m distressed fund

Dubai developer Deyaar has postponed a 500 million dirham (US$136.1m) distressed property fund after international investors withdrew AED200 million previously committed, a local daily reported. The Gulf emirate's second-largest developer by market value launched the fund last summer to buy distressed properties from its own portfolio as well as other properties, as it looked to boost returns for shareholders. "It is the wrong time for Deyaar to go out and try to raise the funds from the international community," the firm's Chief Executive Markus Giebel told The National paper. "We will wait until the dust settles ... and restart in two or three months, as we believe the market will come back."

Dubai's Istithmar puts Inchcape on sale for US$700m

Dubai World's investment arm Istithmar has put port and shipping agent Inchcape Shipping Services up for sale for US$600-700 million and has attracted interest from private equity groups, the Financial Times reported in early February. The report said Advent International, Cinven, Charterhouse Capital Partners, Montagu Private Equity, TPG Capital and Kohlberg Kravis Roberts & Co were all working on bids potential bids for London-based Inchcape, which is one of the world's biggest marine management firms with some 200 offices globally. Dubai World is seeking to offload assets as part of a restructuring plan after the state-owned conglomerate rocked global markets last November when it said it would request a delay on paying US$26 billion in debt linked to its main property units. Istithmar bought Inchcape for US$285 million in 2006 from London-based private equity fund Electra Investment Trust.

Galfar sets sights on India, Libya markets

Galfar Engineering & Contracting SAOG is confident of making inroads into the Indian and Libyan markets as Oman’s largest national contracting company increasingly eyes overseas opportunities to boost its order-book position, which climbed at an impressive OAR465 million at the start of this year. Galfar Chairman Salim Said al Fannah al Araimi said the company also expects to secure some of the numerous oil and gas projects, as well as infrastructure schemes, currently under tender in the Sultanate — contracts that will further “consolidate and maintain our market position in 2010 and beyond”. “Galfar will continue to maintain its market position as the largest national contracting company in Oman. With one of the regional airports already awarded to us, we are looking forward to more such prestigious projects coming our way. With the wise government’s keenness in developing roads, railway line, ports, airports, power and the water and wastewater sectors, we look forward to a (bright) future in the local construction arena,” he stated in the Director’s Report for the financial year ended December 31, 2009. In particular, he identified India and Libya as prospective markets. India, for example, holds great promise in the area of infrastructure development. “We are concentrating on the infrastructure sector in the Indian market, having submitted prequalification (offers) for roads and port projects based on the Design Build Finance Operate and Transfer (DBFOT) model. Equally promising is the Libyan market, given the government’s efforts to substantially enhance oil output, the chairman said. Galfar plans to set up joint ventures with local Libyan firms and bid for projects towards the end of the year.

New property firm launches in Qatar

A new property firm has launched in Qatar, with the goal of leveraging long-term investment opportunities in the GCC. Matrix Property Middle East is a joint venture between UK-based financial services firm, Matrix, and ME Alignment, a Qatar-based real estate development and investment company owned by members of the Al Attiya Family. According to the company, Matrix Property Middle East will concentrate on the acquisition of high quality income generating projects predominantly in the industrial, residential and office sectors. The firm will focus on Qatar, Saudi Arabia and the UAE.

25pct of Mideast construction jobs delayed, cancelled

About 48 percent of the Middle East's construction projects are being executed while another quarter have been delayed or cancelled, according to new figures. Research company Proleads said there were around US$500 billion worth of building projects in the region. Of these, it said 48 per cent were being executed, 27 per cent were in the pre-execution phase while 20 per cent were on hold and 5 per cent had been cancelled.

Marinas deal inked for Bahrain waterfront project

Mourjan Marinas IGY, the international marina developer and operator, announced a deal to build two marinas in Bahrain. The partnership with Global Real Estate Development Co. (GREDCO) will see the development of two marinas as part of the upcoming Marsa Al Seef project in the kingdom. GREDCO is a subsidiary of Global Banking Corporation (GBCORP), the developers and financial advisors of the Marsa Al Seef project, the maritime destination in Bahrain.