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Nov 27 2011

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Bahrain companies leading the way in delivering affordable housing

As the Bahraini Government is faced with a growing shortfall of affordable housing, currently estimated at 40,000 units, it must react quickly and efficiently to meet the soaring demand.

However, as many question the efficacy of relying on the public sector to deliver the required housing, major Bahrain-based companies have come together to develop a blueprint for planning, financing, delivering and managing housing delivery - both within the Kingdom and across the wider MENA region.

Financing affordable housing schemes remains one of the biggest challenges to delivering housing in the region. As access to traditional sources of finance remains difficult in the wake of the renewed global financial crisis and increasing nervousness in the markets, one Bahrain-based firm is looking at examining alternative financing structures in order to ensure housing delivery even in today's market.

Naseej has been discussing a Public Private Partnership with the Bahraini Government - a potential future partnership that would ensure the timely delivery of 4,000 homes, designed specifically for the resident Bahraini population.

"It is clear that the working and dynamic partnerships between governments and developers is the way forward in delivering affordable housing to the region," said Christopher Sims, CEO, Naseej .

Another major challenge to affordable housing delivery and take-up is the existing provision of 'affordable' housing. Many developers have traditionally delivered low-cost and low-quality housing, which did not attract buyers, lost tenants and resulted in marginal profits for the company, and unsustainable communities for the region. Diyar Al Muharraq, a regional developer based in Bahrain, is driving low-cost, high-quality and relevant developments.

New masterplanning, design and construction techniques are also being pioneered by companies in Bahrain and across the region, including RMJM and Grocon Middle East.

Underpinning the success of affordable housing delivery is the critical access to sustainable housing finance, or mortgage, schemes. Sakana Holistic Housing Solutions , a regional pioneer of the nascent mortgage market in Bahrain, sees Governmental regulation as key to developing more advanced housing finance solutions.

"There is enormous demand for sustainable mortgage schemes across the MENA region," said Sakana 's CEO R. Lakshmanan. "However, the lack of developed regulations, advanced capital markets to provide liquidity, and funding is hampering the development of the market, and in turn, restricting access to housing, especially affordable housing.

"Local Governments are gradually developing the appropriate regulation, and once these are in place, we foresee double-digit growth for the region's mortgage market."

Whilst there is significant work yet to be done to meet the looming 40,000 units of required affordable housing in Bahrain, the innovative and committed projects being launched by Bahrain's private sector community will ensure that the country continues to lead the way in meeting its affordable housing requirement.

All these discussions and conclusions were drawn at the recently concluded inaugural MENA Mortgage and Affordable Housing Congress, which took place on 23-24 November 2011, under the patronage of the Central Bank of Bahrain and in partnership with Sakana Holistic Housing Solutions and Naseej Properties.

Inaugurated by the Hussain Sharaf, Director of Islamic Financial Institutions at the Central Bank of Bahrain , the conference highlighted the major developments in home financing and affordable housing delivery in Bahrain and across the MENA region.

Other experts gathered at the Congress included Saudi Home Loans, Deutsche Gulf Finance, Naseej Properties, Mazaya Qatar, Dar Al Tamleek, Tamweel, Amlak International, Sakana Holistic Housing Solutions , Emaar Community Management, Diyar Al Muharraq, as well as international experts from the International Finance Corporation (part of the World Bank Group), RMJM and the Canada Mortgage and Housing Corporation.

-Ends-

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About Sakana
Sakana Holistic Housing Solutions , Bahrain commenced operations in December 2006 as a dedicated provider of Sharia'a compliant mortgage finance. Sakana demonstrated significant growth since inception and has broadened its holistic focus by adding property consulting and property development to its portfolio. Sakana is an Islamic finance company regulated by the Central Bank of Bahrain . Sakana is owned by Capinnova Investment Bank (wholly owned subsidiary of BBK) and Ithmaar Bank.

Sakana is a member of the Waqf Fund for Research, Education and Training in Islamic Finance and Bahrain Property Development Association (BaPDA).

For more information, please visit www.sakanaonline.com.

About Naseej
As the MENA region's first fully-integrated real estate and property development company, Naseej encompasses the entire value chain from concept to completion. Headquartered in the Kingdom of Bahrain, and capitalised at US$ 286 million, the Company was established by prominent private and public sector investors to act as pioneering catalyst for addressing the region's affordable housing needs, with an initial primary focus on Bahrain.

The core activities of Naseej comprise design and master planning; development and construction; building components; mortgage facilitation; and asset management. Demand-driven, the Company is committed to delivering value-based real estate solutions through insight and innovation; applying pragmatism when meeting new challenges; providing real benefits to individuals and societies and individuals; and building the foundations of prosperity for future generations.

For further press information please contact:
Lindsay Johnston
Total Communications
Tel: + 971 4 336 9909
Mob: +971 50 152 3368
Email: lindsay@totalcompr.ae

© Press Release 2011