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Ithmaar to unveil BD2b realty firm

New company to provide affordable housing
Ithmaar Bank will lead a consortium of regional institutional investors to launch Naseej , a first regional realty firm with an authorised capital of BD2 billion and paid-up capital of BD300 million, aimed at providing affordable housing to the medium-sized income segment of society.

The firm plans to carry out the development and construction services, manufacturing and importing building materials, facility-management services, mortgage services, real-estate planning and consultancy services as well as marketing services.

"The launch of Naseej is an important milestone in Bahrain's economic progression and is an example of the successful collaboration of private sector institutions working in tandem to address the growing socio-economic issues. Bahrain's construction industry has been plagued by constraints and skill shortages for far too long which has caused delays to several mega-developments and hindered the growth of the economy.

" Naseej was born out of our collective desire to eliminate these constraints and accelerate the development of our nation through the creation of a fully integrated, real estate development company that would manage the entire spectrum of the construction and real estate business from the initial planning stages to the manufacture of building materials, financing and marketing advisory services for developments," said Khalid Janahi, Ithmaar Bank chairman. The consortium consists of nine regional institutions constituting the Ithmaar's founding shareholders and three-fifths of its initial paid-up capital being contributed by the company's founding shareholders including the Social Insurance Organisation (the merged entity of the Pension Fund Commission and General Organisation of Social Insurances), Al Safat Investment Company , Bank of Bahrain and Kuwait (Kuwait) , the Eskan Bank , Palm Capital SPC, Venture Capital Bank , Global Investment House (Kuwait), Shamil Bank and Ithmaar Development Company .

Shareholders will raise the remaining two-fifths of Naseej 's capital through an initial public offering (IPO) to be listed on the Bahrain Stock Exchange later this year. Shares will be set at 100 Bahrain fils per ordinary share. The government of Bahrain Cabinet approved the IPO a couple of weeks ago.

"The most important characteristic of Naseej is that it has been created to provide a solution to the housing problems of the people of this country. The company will initially focus on the Bahrain market but plans to expand its footprint to other Gulf countries and beyond within the next few years," Janahi added.

"Reports show that recent crisis in the market have demonstrated that the Kingdom of Bahrain has not had the ability to aggressively drive the booming real-estate and construction industry. The nation's over-dependence on imports to fulfill the demand for essential building materials has held it back and prevented the timely completion of several housing and infrastructure projects key to enhancing Bahrain's progress," he said. "With the launch of Naseej we are confident the local community will have access to the resources and expertise necessary to continue Bahrain's long-term growth and development. The creation of such an extraordinary entity like this firm is a further reiteration of our commitment to the community and our desire to assist in building the nation."

"Furthermore, Ithmaar Bank and Naseej 's institutional founding shareholders have made the decision not to take a premium on the company's shares when launching the IPO," added Janahi. "Our foremost intention with launching the region's first fully integrated infrastructure and real-estate development company is to provide a boost to the local construction and real-estate industry.

"Through ensuring price stability and competitiveness we will also go a long way towards guaranteeing affordable housing solutions to all sections of the Bahraini community who will benefit immensely from Naseej 's large-scale and holistic solutions," he underlined. Upon the launch of the IPO, only receiving banks will accept a fee. Ithmaar Bank and its founding shareholders will forgo their premium on the shares.

Janahi added: "Our long-term vision is to expand Naseej 's presence within the Middle East region and beyond in the near future, and to that end we plan to substantially augment the company's paidup capital." Shaikh Ebrahim bin Khalifa Al Khalifa, Minister of Housing and chairman of Eskan Bank , said the rapid increase in oil revenues together with the liberalisation of real-estate markets have together pushed the demand in the real-estate market up to levels higher than those of the supply of construction materials and the skilled labour force. The result has been a disability of contractors to timely implement construction projects.

By Mahmood Rafigue

© Bahrain Tribune 2008