BAHRAIN COMMERCIAL

Bahrain Office & Retail Market Review Q2 2009

REAL ESTATE MARKET REPORTS ISSUE 7 www.realcapita.com BAHRAIN COMMERCIAL

In this issue of RealOUTLOOK, we revisit the Commercial Real Estate Market for the second time since Q3 2008. The main headlines of the Commercial Market report do not differ from the Residential Market during the same period. Demand is shrinking which has creased an evident case of oversupply and as a result prices have spiraled downwards. This chain reaction is the main force dictating the behavior of all market participants; developers, investors and banks.

Moreover, the repercussions of the financial crisis exposed the inherent weaknesses in both segments ofthis market: office and retail. In our last survey of the Commercial Market we were concerned about the apparent imbalances in both segments which are now more pronounced in the wake of the global turbulences in financial and real estate markets.

The Office Market, founded on shaky fundamental drivers even during the boom, is now in a state of chaos. This segment by nature is highly sensitive to the economic cycle; many companies that acquired large office spaces in anticipation of expansion plans have now put their plans on hold. Add to this the large volume of speculation activities in this segment that shot land prices through the roof. Most speculators have withdrawn from this segment. Anecdotal evidence suggests that land prices in Seef (one of the main CBDs in Bahrain) has fallen by as much as 50-60%!

Furthermore, we address in this report the many inconveniences endured by occupants of prominent CBDs such as the lack of sufficient parking spaces and traffic congestion. We believe that the revival of the Office Market in the Kingdom requires more systematic efforts and planning to overcome the current slump.

The situation seems different in the Retail Market however, as the current state of stability is threatened by clear signs of the market reaching a saturation point. Any further expansion is exerting further pressure on Occupancy Ratios and prices. As the supply increases, retailers are reporting less than adequate sales and declining margins and have been reluctant to take any more spaces. This is mainly due to the slow down of growth in tourist arrivals. Since the beginning of Q3 2008 this figure has been growing at a slower pace. Going forward, we believe that the next big push for the Retail Market may come only when the Qatar causeway opens for business.

Qais Al Maskati Deputy Chief Executive

RealCAPITA

Wind Tower Diplomatic Area, P.O. Box: 11627 Manama, Kingdom of Bahrain Tel: +973 17 54 11 44 Fax: +973 17 53 06 41 [email protected] www.realcapita.com COMMERCIAL BAHRAIN Previous Issues Liases Foras RealCAPITA Profiles Annex 4: Area Definitions Annex 3: DefinitionsUsedintheReport Annex 2: EstimationofRequiredRetailSpendinBahrain Annex 1: Why Bahrain Annexes Retail Market Office Market Commercial Market Outlook Commercial Market Outlook Retail LeaseRatesDeclinedSharplyinMost Areas Retailers Cautiousin Acquiring NewSpace, RetailMarket OccupancyDropsto75% Area Wise Analysis: NewRetailMarket Supply Targets theResidentPopulation Retail Market’s Underlying DriversareIntactbutGrowthisbecomingstagnant Retail Market SupplyGrewOvertheLast3Quarters Defining theStructureofBahrain’s RetailMarket Retail Market: GrowthBecomingPatchy and Area Specific Retail Market Review Prices UnderIntensePressure; Land Values DeclineDramatically Inconvenience inCentral Manama, Poor QualityinSeefDistrict The EndoftheFreehold OfficeSaleModel Employment GrowthSlowsDown; DirectImpactonOfficeSpaceConsumptionintheShort Term Current Market OccupancyRatiois Around 72%andfalling But the Active Marketable SupplyIncreasedRapidlyLeadingtoaDropinOccupancies Marketable SupplyReducedModerately, ProposedSupplyDroppedby Two Thirds… Defining theStructureofBahrain’s OfficeMarket The OfficeMarket: OversupplySituationContinues Office Market Review Commercial Market: CorrectionsGoingoninBothSegments Retail Market Office Market Commercial Market Outlook Commercial Market Review

CONTENTS 39 38 34 33 32 31 29 26 25 24 23 23 23 21 20 19 17 16 15 15 14 13 11 11 9 9 7 7 6 6 5 4 3 3 3 3 Commercial Market Reveiw Commercial Market Review

Commercial Market Outlook particularly in the Central Business Districts (CBDs). These reasons mostly relate to questionable city planning and The two segments of the Commercial Market – Office Market the lack of adequate infrastructure. and Retail Market – continued on their different paths in Q2 2009. The Office Market is struggling with severe over • Due to declining Occupancy Ratios, the prices of office supply while the Retail Market has maintained a fragile state space have come under intense pressure. of equilibrium.

Retail Market Office Market • While the Retail Market remained one of the most stable The crisis forced many • The Office Market is the segment of real estate that is segments of real estate in Bahrain, there are increasing companies to cancel most sensitive to fluctuations in the economic cycle. signs that the growth has started becoming patchy and With economic conditions deteriorating steadily over the area specific. their expansion plans last year, the demand for office space depleted rapidly in while additional • We witnessed increased interest in areas that are home Bahrain. office space was still to Resident Population while the interest dwindled in • The Marketable Supply of office space dropped from areas that largely attract tourists. being constructed. 454,000 sq.m. to 396,00 sq.m. in the last three quarters (a drop of 12.7%). Since the onset of the crisis, a couple • Unlike the supply in the Residential Market or the Office of projects were put on hold and others have been Market, supply in the Retail Market showed moderate converted to residential or hospitality developments. growth between Q3 2008 and Q2 2009. The Existing Stock went up by 61.7% but the Marketable Supply • The Proposed Supply dropped by 68% over the same went down by 24.4%. Combined together, the Retail period as most projects that were announced in late Market supply went up by almost 70,000 sq.m. in the 2008 have been put on hold. last 9 months.

• Despite these drops, the office supply remains high • The Resident Population and tourist arrivals are the compared to the market demand. In Sep-08, the two key drivers of the Retail Market in Bahrain. After Occupancy Ratio of Active Marketable Supply was revising the Resident Population numbers in 2007, the 77%. The crisis forced many companies to cancel their government has not declared the population numbers expansion plans while additional office space was still of 2008 and 2009 so far. But there is a general feeling being constructed. As a result, the Occupancy Ratio has in the market that the Resident Population is growing at dropped to just 45% by Jun-09. 8% annually.

• The consumption of office space is directly related to • Tourist arrivals continued to grow at a strong pace upto the generation of employment in the economy. Bahrain’s to the end of 2008. There are indications that during economy has weathered the global financial storm well. 2009, tourist arrivals increased at a slower pace. Although the pace of new job generation has declined sharply, only a marginal number of jobs were lost. The • As the growth rate of tourist arrivals slows down, declining employment trend foretells a negative trend in developers shifted their focus to the Resident the near term for office space consumption. Population. In the last 3-4 quarters we witnessed the introduction of several new projects in East Riffa, A’Ali, • We believe that although the inherent demand for office Budaiya, Muharraq and Hidd. All of which do not attract space is low in Bahrain, there are several reasons that significant numbers of tourists. will further depress the consumption of office space

3 OFFICE MARKET

• The biggest retail destination, the Seef District, maintains Commercial Market: Corrections Going on in almost a 96% Occupancy Ratio. However, we have Both Segments learnt from many sources that retailers are complaining Much water has passed under the bridge since we last about lower than expected business since the onset of addressed the commercial market in Q3 2008. The crisis the crisis but cannot leave the shops due to long-term has punctured the recent three year real estate boom in binding lease contracts. the Kingdom and brought several projects to a standstill. • The emerging retail areas of Central Manama, Muharraq Price corrections have become commonplace and market and Isa Town achieve Occupancy Ratios between 40% conditions have become very challenging. to 75%., which are significantly less than the Seef District. The Office Market, where the growth relied on unstable fundamental drivers during the good times, is now in • With the exception of for Isa Town, the Average shambles. The Retail Market however, has performed Lease Rates have come down sharply across all areas. relatively well but with the introduction of several new malls Muharraq including Amwaj Islands has witnessed a has resulted in weak occupancy figures. significant correction with the Average Lease Rate dropping by 59%, while the Seef District has undergone In this issue, we have redefined the structure of both the a correction of 24%. Office Market and the Retail Market with more robust and timely concepts. These new concepts and segmentations allow us to have a better understanding of the inner workings under constantly changing market conditions.

Retailers are complaining about lower than expected business since the onset of the crisis

4 Office Market Review Office Market Review

With economic The Office Market: Oversupply Situation Defining the Structure of Bahrain’s Office conditions Continues Market deteriorating The Office Market is the segment of real estate that is most Chart 1 below defines the structure of Bahrain’s Office over the last year, sensitive to fluctuations in the economic cycle. With economic Market in simple terms. The entire market is divided into conditions deteriorating steadily over the last year, most three categories. most companies companies have delayed or cancelled their expansion plans. 1. Existing Stock – Supply that existed in the market have delayed or As a result, the demand for office space depleted rapidly before the cut off date of our ground surveys and has cancelled their in Bahrain. been consumed fully after it was introduced in the market. expansion plans. Many companies have also acquired large offices in 2. Marketable Supply - Supply that is either introduced anticipation of future expansions planned before the in the quarter under study or was introduced previously crisis. Since these plans have been put on hold now, these but has not been consumed fully. The Marketable Supply companies sit on excess space and may not acquire any is further categorised as Active and Passive Supply. additional space even after the economy recovers and they 3. Proposed Supply – Supply that has been announced begin hiring new staff once again. and is likely to commence development in the near future.

Chart 1: Structure of Office Market in Bahrain

Existing Stock

Active Marketable Supply

Office Market Marketable Supply

Passive Marketable Supply

Proposed Supply

In our previous survey of the Commercial Market in Bahrain developments keep shifting between the two categories back in Q3 2008, we categorised the Marketable Supply (Freehold and Leasehold) depending on the prevailing market into Freehold and Leasehold and introduced the concept conditions. This makes the consistency of using these terms of Freehold Consumption Cycle (FCC) and Leasehold difficult. Therefore, we will use these terms only when we feel Consumption Cycle (LCC). they will add value to the analysis of the market.

Though useful, these terms may not be used in future surveys of the Commercial Market. We have witnessed that many

6 OFFICE MARKET

Marketable Supply Reduced Moderately, were shifted to the Existing Stock. All these factors led to an Proposed Supply Dropped by Two Thirds… 12.7%% drop in Marketable Supply.

Table 1 shows Existing Stock increased by 1.5% as two The Proposed Supply dropped by 68% as most projects that projects that were part of Marketable Supply in Sep-08 were announced towards the end of 2008 have been put shifted to Existing Stock after being fully consumed. on hold.

The Marketable Supply of office space dropped from We reiterate the observation that we have been making 454,000 sq.m. to 396,323 sq.m. – a drop of 12.7% in the in all previous RealOUTLOOK reports that supply reduction last 3 quarters. Since the onset of the crisis, a couple of is a positive force in the market as it will eventually bring projects were put on hold and others have been converted the demand – supply equation towards a desirable market to residential or hospitality developments, while two projects equilibrium.

Table 1: Office Market Total Supply in Bahrain in sq.m. (Sep 2008 – Jun 2009)

% Change Sep 2008 Jun 2009 (Sep 2008 – Jun 2009)

Existing Stock – A 500,000 507,295 1.5%

Marketable Supply – B 454,053 396,323 -12.7%

Proposed Supply – C 158,260 50,409 -68.1%

Total Supply – A + B + C 1,112,313 954,027 -14.2%

But the Active Marketable Supply Increased in the market while the total demand of office space was Rapidly Leading to a Drop in Occupancies very limited in Bahrain. Office developers are now facing their worst fears. Table 2 shows the breakdown of Marketable Supply into Active and Passive categories. The real estate boom period Table 2 shows that the Active Marketable Supply has (2005-2008) witnessed an unprecedented burst of new increased by 33.5% between Sep-08 and Jun-09 as 63,000 office developments without due regards to the underlying sq.m. of space was added to this category. consumption potential; i.e. many office towers were released

Table 2: The Status of Marketable Supply in sq.m. (Sep 2008 – Jun 2009)

% Change Sep 2008 Jun 2009 (Sep 2008 – Jun 2009)

Marketable Supply 454,053 396,323 -12.7%

Active Marketable Supply 187,334 250,170 33.5%

Passive Marketable Supply 266,719 146,153 -45.2%

7 OFFICE MARKET

The crisis forced Furthermore, many projects are at advanced stages of sq.m mark. It will experience a significant jump towards the many companies construction and can be finished in less than 6 months. Chart end of 2010 and will finally approach the 400,000 sq.m 2 shows our estimated growth in Active Marketable Supply. mark by the end of 2011. to forfeit their By the end of this year we expect it to approach the 300,000 expansion plans while additional office space was Chart 2: Projected Expansion in Active Marketable Supply in sq.m. (Jun 2009 – Dec 2011) being constructed in 2009. 383,872 396,323 396,323 347,269 292,102 250,170

Jun-09 Dec-09 Jun-10 Jun-10 Jun-11 Dec-11

Table 3 shows the consumption pattern of Active Marketable This Occupancy Ratio is most likely to fall further over the Supply between Sep-08 and Jun-09. In Sep-08, the next 2 quarters as another 42,000 sq.m. of space will be Occupancy Ratio was almost 77% for this category. The crisis released by the end of this year and the pace of consumption forced many companies to forfeit their expansion plans while is not expected to pick up soon. additional office space was being constructed in 2009. As a result, the Occupancy Ratio has dropped to just 45% in Jun- 09. The market now rests on an excess Inventory of 137,000 sq.m. of office space.

Table 3: Consumption Pattern of Active Marketable Supply in Bahrain in sq.m. (Sep 2008 – Jun 2009)

% Change Sep 2008 Jun 2009 (Sep 2008 – Jun 2009) Active Marketable 187,334 250,170 33.5% Supply

Leased Stock 144,329 113,147 -21.6%

Occupancy Ratio 77.0% 45.2% -

Inventory 43,005 137,023 218.6%

8 Office Market Review

Current Market Occupancy Ratio is Around Table 4 shows the estimation, the Existing Stock is around 72% and falling 507,295 sq.m. and we believe that the current Occupancy Ratio in this stock is 85%. Combining that with the Occupancy Note that the Occupancy Ratio estimated in Table 3 is only Ratio of the Active Marketable Supply of 45% mentioned in for the Active Marketable Supply. To estimate the Occupancy Table 3, gives us a market wide Occupancy Ratio of 72%. Ratio for the entire market (Existing Stock + Active Marketable Supply), we have made some informed assumptions about As we expect the Occupancy Ratio of Active Marketable the Occupancy ratio of the Existing Stock. Supply to fall further, the market wide Occupancy Ratio may decline to less than 70% over the next 12 months.

Table 4: Market Wide Occupancy Ratio of Office Space (Jun 2009)

Existing Active Marketable Stock Supply Total Total Available Space for Leasing (sq.m.) 507,295 250,170 757,465

Leased Stock (sq.m.) 431,201 113,147 544,348

Occupancy Ratio 85.0% 45.2% 71.9%

Employment Growth Slows Down; Direct The table shows the growth rate of the targeted employment Impact on Office Space Consumption in the fell from 17.8% in 2008 to 7.9% by Q2 2009. Short Term The consumption of office space is directly related to the generation of employment in the economy. Bahrain’s economy has weathered the global financial storm well by not losing a significant number of jobs, however the pace of new job generation has declined sharply.

Table 5 shows the sector wise breakdown of employment numbers as provided by the Labour Market Regulatory Authority (LMRA). The employment numbers are provided for 6 broad sectors: Construction, Trade, Finance, Others, Public Sector and Domestic Worker. The Public Sector and Domestic Worker categories do not generate demand for office space. The government predominantly houses the public sector workers in its own properties while domestic workers do not require office space all together. Thus, the employment figures for these two categories have been excluded in determining the office space needs of the employed work force in Bahrain.

9 Office Market Review

Table 5: Sector Wise Employment Trend in Bahrain (2004 – 2009)

2004 2005 2006 2007 2008 Q2 2009 Total Employment 373,309 418,172 460,265 503,784 578,307 599,017 Construction - A 78,652 88,529 101,269 115,582 127,636 135,908 Trade - B 47,251 58,226 62,974 71,599 117,336 119,908

Finance - C 10,152 11,943 13,150 15,343 14,864Inventory - FCC 15,357 Others - D 139,948 153,311 167,085 176,683 186,864 193,063 Public Sector - E 52,720 54,517 57,840 59,966 59,067 59,291 Domestic Workers - F 44,586 51,647 57,948 64,610 72,541 75,490 Targeted Employment 276,003 312,009 344,478 379,207 446,700 464,236 (A+B+C+D) Growth Rate 13.0% 10.4% 10.1% 17.8% 7.9%*

Source: LMRA * Annualised Growth Rate number for Q2 2009

Chart 3 shows the quarterly incremental change in the seen in the market that many companies, particularly in targeted employment (A+B+C+D) in Table 5. After hitting the finance sector, have leased out large offices but have the peak in Q4 2008, new job creation plunged in Q2 2009. a relatively small headcount. This means that even when This shows that Bahrain is experiencing a delayed blow to its these companies start recruiting again, they may not require job market due to the global financial crisis. additional office space for some time.

Clearly, the declining employment trend foretells a negative trend in the near term office space consumption. We have

Chart 3: Quarterly Incremental Movement in Targeted Employment (A+B+C+D) in Bahrain (Q1 2005 – Q2 2009)

25،000

20،000

15،000

10،000

5،000 -

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q2 Q2 (5،000) 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 2008 2008 2008 2008 2009 2009 (10،000) Source: LMRA

10 OFFICE MARKET

The End of the Freehold Office Sale Model Avenue and projects on the King Faisal Highway; and the The Lease Rates second is the Seef District, which includes Seef and Sanabis. In our previous survey of the Office Market in Q3 2008, we are mostly in the noted that many developers were testing a new concept of Table 6 shows the area wise market dynamics of the key range of BD 6.00 Freehold offices. The crisis has completely eliminated the office destinations in Bahrain. The Leased stock is estimated to BD 12.00 in spoils from this concept. Practically, all the stock that was using 85% Occupancy Ratio in Existing Stock and the actual most areas. sold to investors has been returned back to the developers recorded Occupancy Ratio in the Active Marketable Supply. except for a couple of cases; therefore, no office development is being offered for sale today. Central Manama is running close to 75% Occupancy Ratio but Seef District is witnessing a lower Occupancy Ratio at Currently, there is no trading activity in this market, therefore 65%. The prevailing lease rentals are shown in the last we are unable to compare the prices of office space in Q2 column. The tenants usually pay an additional 15% service 2009 with those in Q3 2008. charge and 10% municipality charges.

In a couple of cases, some inquires were raised by large The Lease Rates are mostly in the range of BD 6.00 to companies for purchasing entire buildings but no deals were BD 12.00 in most areas. The high lease rate at Amwaj Islands struck till the end of Q2 2009. We reckon that the developers is on account of the fact that the only operation commercial will have to go back to the established model of developing building here has special structural features which is useful office space on a leasehold basis. for data storage. Therefore, the current lease rate of BD 20.00 to BD 22.00 may not be representative of potential Lease Inconvenience in Central Manama, Poor Rates at Amwaj Islands. Quality in Seef District

There are two prominent CBDs in Bahrain: The first is Central Manama, which includes the Diplomatic Area, Government

11 Office Market Review

Inconvenience in Table 6: Area Wise Office Market Dynamics (Jun 2009) Central Manama CBD has forced Active Prevailing Existing Marketable Leased Occupancy Lease Rates high grade buildings Stock (sq.m.) Supply (sq.m.) Ratio (%)* (BD per sq.m. to offer low Lease (sq.m.) per month) Rates. Central Manama 367,000 177,935 409,097 75.1% 6.00-13.00

Seef District 130,000 61,566 125,500 65.5% 7.50-12.50

Juffair - 8,369 - NA 7.50-8.00

South Manama - 2,300 1,000 43.5% 7.00-7.50

Amwaj Islands 3,000 - 2,550 85.0% 20.00 – 22.00

* Occupancy Ratio for each area is calculated assuming 90% Occupancy in Existing Stock

We believe that although the inherent demand for office 4. The quality of most buildings in Seef leaves a lot to be space is low in Bahrain, there are several reasons that will desired. As per the government building regulations, further depress the office space consumption particularly in one car parking slot is to be provided for every 70 sq.m. the CBDs. These reasons are mostly related to questionable of leasable space. This is in contrast with the office city planning and the lack of adequate infrastructure. We buildings in Dubai where developers generally provide have the following observations related to this issue: one parking slot for every 50 sq.m. of leasable space. To date, only one building in Seef conforms to the standard 1. Although Central Manama is the oldest and the biggest set by Dubai buildings. CBD, accessing area and finding a parking spot is very inconvenient. This problem has even forced many high 5. Many buildings in Seef have a common parking ramp for grade buildings in Diplomatic Area and on Government cars going up and coming down, which is wide enough Avenue to offer on lower Lease Rates than lower grade for just 1 car. This type of design can lead to a higher buildings in the Seef District. number of accidents and reduce the traffic efficiency of the park during peak hours. 2. The lack of proper planning in their surroundings is severely affecting the office consumption in the 6. Some properties in Seef have been converted from otherwise world-class Bahrain Financial Harbour, and residential buildings into commercial ones midway Bahrain World Trade Centre. through the construction process. Consequently, they do not have adequate parking space and lifts. 3. The development of the Seef District is taking place in a very haphazard way. Commercial pockets are 7. Juffair and South Manama do not qualify as CBDs as generously interspaced with residential and hospitality both areas contain stray developments. There were developments and vice versa. This results in complete attempts to launch office developments in these areas chaos when it comes to traffic management and over the last 2 years but they have not met with any parking option. However, as the Seef District remains success. underdeveloped, there are still many vacant plots of land that can be used as open parking areas.

12 OFFICE MARKET

8. Due to the abovementioned constraints in Central multiplying the lease rate by 12 months and weighing it with Manama and Seef District, many companies still prefer the respective Occupancy Ratios. Although the Occupancy to operate from independent villas in Adliya, Mahooz Ratios shown in the table are point estimates for Jun-09, and Um Al Hassam which are predominantly residential the ratios may decline further over the next year. Thus, taking destinations. higher Occupancy Ratios is not justified at this stage.

The fair value is BD 941 per sq.m.for the Diplomatic Area, Prices Under Intense Pressure; Land Values BD 1,470 per sq.m. for King Faisal Highway and BD 1,188 per Decline Dramatically sq.m. for the Seef District. Note, unlike the Q3 2008 survey Due to declining Occupancy Ratios, the prices of office space where we provided estimates of Average Rate (BD per sq.m.) have come under intense pressure. We mentioned earlier that for office space in various areas, estimates of prevailing there are no trading activities in the Office Market thus actual prices could not be generated in Q2 2009. This is on account prices cannot be verified. However, the “fair value” prices can of absence of any trading activities in office space. In most be estimated using the Occupancy Ratio and prevailing Lease cases, the developers have refused to quote their prices. Rates as per Table 7 below.

The analysis below focuses on the three most popular CBDs: the Diplomatic Area, King Faisal Highway and the Seef District. The fair values in the last column are estimated by

Table 7: Fair Value Estimation of Office Space Prices (Jun 2009) Prevailing Lease Fair Value Rates @ Rates Occupancy 8% Cap Rate (BD per sq.m. per Ratio (BD per sq.m.) month) Central Manama - Diplomatic Area 8.00 78.4% 941

Central Manama - King Faisal Highway 12.50 78.4% 1,470

Seef District - Seef 11.50 68.9% 1,188

The fair values shown in Table 7 are significantly lower fallen by as much as 50-60% (relative to their peak value). compared to prices in Q3 2008. At these prices, many Furthermore, even after the dramatic fall in prices, the trading developers may make significant losses as their cost structure volume remains low. is higher. However, these are the prices where we feel there could be genuine buyer interest in the market, although the The prices in Office Market will most likely decline further as the number of actual buyers may not be very high. Occupancy Ratios and Lease Rates are still expected to fall further. The speculation frenzy in 2006 and 2007 pushed land prices through the roof, which is the root cause of the higher cost structures. Land prices have come down significantly. We have anecdotal evidences that the value of land in Seef has

13 Retail Market Review RETAIL MARKET

Retail Market: Growth Becoming Patchy and • Existing Stock – As soon a mall begins operations i.e. Area Specific it is open for consumers, it is treated as Existing Stock. While the Retail Market remained one of the most stable • Marketable Supply – All malls that are under segments of real estate in Bahrain, there are increasing construction but have not begun operations are part signs that the growth has started becoming patchy and area of Marketable Supply. The Marketable Supply is further specific. We witnessed increased interest in areas that are categorised as: home to a Resident Population while the interest dwindled in • Active Marketable Supply; and areas that largely attract the tourists. • Passive Marketable Supply. In line with the Office Market analysis above, we have • Proposed Supply – Supply that has been announced redefined the segmentation of the Retail Market in response and is likely to commence development in the near to the fundamental changes in the market dynamics. future.

Defining the Structure of Bahrain’s Retail Market Chart 4 below defines the structure of Bahrain’s Retail Market. The structure is comparable to the structure of the Office Market except for minor differences in definitions. While we have given detailed definitions in Annex 2, quick definitions are provided here again for the reader’s convenience:

Chart 4: Structure of the Retail Market in Bahrain

Existing Stock

Active Marketable Supply

Retail Market Marketable Supply

Passive Marketable Supply

Proposed Supply

15 Retail Market Review

Retail Market Retail Market Supply Grew Over the Last 3 A better measure of the developers’ interest in the Retail may be reaching Quarters Market is the combined volume of Existing Stock and Marketable Supply. When these two categories’ are added, Unlike the supply in the Residential Market or the Office a short term the Retail Market supply went up by almost 70,000 sq.m. Market, the Retail Market Supply showed moderate growth saturation level. in the last 9 months. We witnessed a couple of new malls between Q3 2008 and Q2 2009. Table 8 shows that the starting development during this period and another Existing Stock increased by 61.7% and Marketable Supply project has been announced recently but not commenced declined by 24.4%. This happened as a sizeable chunk construction. This shows continued interest by developers in got shifted from Marketable Supply to Existing Stock. The retail projects. However, the Retail Market may be reaching a proposed supply dropped by 48.6% as several projects were short term saturation level. cancelled.

Table 8: Retail Market in Bahrain in sq.m. (Sep 2008 – Jun 2009)

Sep 2008* Jun 2009* % Change Existing Stock – A 247,065 399,417 61.7%

Marketable Supply – B 334,805 253,172 -24.4%

Proposed Supply – C 760,022 390,397 -48.6%

Total Supply – A + B + C 1,341,892 1,042,986 - 22.3%

* Due to changes in the definitions, the supply numbers of Sep-08 and Jun-09 may not be directly comparable

Chart 5 shows that Active Marketable Supply accounts for status of the Marketable Supply which indicates that only a 63.5% of the Marketable Supply and remaining 36.5% is small portion (around 14%) of Marketable Supply is Ready Passive Marketable Supply. Chart 6 shows the construction for Operation (See the definitions in Annex 2).

16 RETAIL MARKET

Chart 5: % Breakdown of Marketable Supply into Chart 6: % Construction Status Breakdown of Active and Passive (Jun 2009) Marketable Supply (Jun 2009)

Under Construction 86.2% Ready for Operation 13.8%

Active Marketable Supply 63.5% Passive Marketable Supply 36.5%

Retail Market’s Underlying Drivers are Intact Tourist arrivals figures continued to grow at a strong pace till but Growth is becoming stagnant 2008. In fact, the growth in tourism was the biggest driver of the Retail Market in Bahrain. There are indications that The Resident Population and tourist arrivals are the two key during 2009, the number of tourists will grow at a much drivers of the Retail Market in Bahrain. Table 9 shows the slower rate. most recent trends in the two numbers. After revising the Resident Population numbers in 2007, the government has not declared the population numbers of 2008 and 2009 so far. But there is a general feeling in the market that the Resident Population is growing at 8%.

Table 9: Trends in Resident Population and Tourist Arrivals in Bahrain (2006 – 2009)

2006 2007 2008 2009E

Resident Population 960,425 1,039,297 NA NA

% Annual Growth 8.1% 8.2% NA NA

Tourist Arrivals 7,288,711 7,378,656 8,630,925 8,926,862

% Annual Growth 15.5% 1.2% 17.0% 3.4%

Source: Central Bank of Bahrain and in-house Estimates

17 RETAIL MARKET

Chart 7 presents the year-on-year growth rate of tourist This shows that the growth of tourist arrivals is reaching a arrivals in every quarter. It shows that the growth rate has plateau in 2009 and may not provide much support to Retail been low since the beginning of Q3 2008 and has been Market going forward in the short-term. negative in the most recent quarter Q2 2009.

Between Q1 2006 and Q2 2008 (10 quarters) the average growth rate of tourist arrivals was 22.3%. However, since the onset of the crisis in Q3 2008, the growth rate has averaged 3.4% over the past 4 quarters.

Chart 7: Year-on-Year Growth Rate of Tourist Arrivals in Bahrain (2006 – 2009)

100.0% 80.0% 60.0% 40.0% 20.0% 0.0% -20.0% Q1 2006 Q3 2006 Q1 2007 Q3 2007 Q1 2008 Q3 2008 Q1 2009 -40.0% -60.0%

18 Retail Market Review

Area Wise Analysis: New Retail Market Supply Table 10 shows the Total Supply broken down into three While there are Targets the Resident Population broad categories for various areas. While 80% of the Existing existing smaller size Stock is concentrated in the Seef District, all the Marketable The common theme of retail developments in Bahrain till malls spread across Supply is fully concentrated in Central Manama, Muharraq & 2008 was revolved around the massive tourist arrivals Amwaj Islands, Budaiya, Isa Town & Sitra and Hidd. the Kingdom, the coming from Saudi Arabia and Kuwait. While there are majority of the big existing smaller size malls spread across the Kingdom, the All these areas have a sizeable Resident Population with majority of the big projects are located in the Seef District. projects are located attractive purchasing power. Some of these areas (Central The smaller malls were largely designed to have an anchor in the Seef District. Manama, Budaiya and Amwaj Islands) have a good mixture supermarket with 10-20 side-shops, fast food outlets and a of local and expatriate population with above-average couple of fine-dining restaurants; examples are the Jawad purchasing capabilities. Opening of new malls in these areas Dome and Najibi Centre. may lessen footfall in the Seef District’s retail destinations. In particular, East Riffa is seeing a burst of retail supply and As the number of tourist arrivals flattens, we noticed some may attract the proximal Resident Populations of Riffa and developers changing their focus to the Resident Population. Hamad Town. In the last 3-4 quarters we witnessed the introduction of several new retail projects in East Riffa, A’Ali, Budaiya, The Proposed Supply is largely concentrated in the Southern Muharraq and Hidd. These malls have a Gross Leasable Areas Governorate with Al Areen taking the biggest share. (GLA) adequate to house a large super market, more than 50 However, all these projects have been delayed and the actual shops and a food court. development of many has now become questionable.

Table 10: Area Wise Retail Supply in Bahrain in Sq.m. (Jun 2009)

Existing Marketable Proposed Total Stock Supply Supply Supply

Central Manama 35,045 92,548 21,000 148,593

Seef District 320,097 - - 320,097

Muharraq Incl. Amwaj 5,404 49,654 40,000 95,058 Islands

Budaiya 11,399 4,500 16,200 32,099

Isa Town & Sitra 27,473 88,970 - 116,443

Southern Governorate - - 269,691 269,691

Hidd - 17,500 43,506 61,006

Total 399,417 253,172 390,397 1,042,986

19 Retail Market Review

Retailers Cautious in Acquiring New Space, (ranging between 40% and 75%). This is due to retailers Retail Market Occupancy Drops to 75% not willing to exit easily from their existing spaces, but at the same time they are moving cautiously when it comes to Table 11 shows the estimation of Occupancy Ratios at various occupying new spaces. areas. The Existing Stock and Active Marketable Supply are the two categories of supply that are currently leasing and Many of these developments are either ready for operations the Occupancy Ratios are estimated against this combined or nearing completion and have been trying to lease space for supply. the last 6-9 months but with limited success. Consequently, the opening dates for these malls have been delayed as the The biggest retail destination, the Seef District, maintains space has not been fully leased. This is in contrast to what almost a 96% Occupancy Ratio. However, we have learnt we witnessed in 2008 in the Seef District when all the space from many sources that retailers are complaining about was pre-leased 12 months before the property became ready lower than expected business since the onset of the crisis for operation. but cannot leave the shops due to long term binding lease contracts. To that effect, the current Occupancy Ratio masks In our last survey of the Retail Market in Q3 2008, we noted underlying weaknesses and may not show it for several that this market may be reaching a near term saturation quarters. level. This is turning out to be correct. We believe that the potential of the Retail Market in the Kingdom is now fully The emerging areas such as Central Manama, Muharraq Incl. exploited and the market no longer offers unconditional Amwaj Islands and Isa Town do not have a large Existing growth opportunities. Stock but have a sizeable Active Marketable Supply. The Occupancy Ratios in these areas are less than spectacular

The biggest retail destination, the Seef Table 11: Area Wise Retail Market Occupancy Ratios (Jun 2009) District, maintains Active almost a 96% Existing Marketable Leased Occupancy Occupancy Ratio. Stock (Sq.m.) Supply (Sq.m.) Stock (Sq.m.) Ratio Central Manama 35,045 17,548 35,193 66.9%

Seef District 320,097 - 306,725 95.8%

Muharraq Incl. Amwaj 5,404 49,654 24,300 44.1% Islands

Budaiya 11,399 4,500 12,227 76.9%

Isa Town & Sitra 27,473 88,970 47,087 40.4%

Southern Governorate NA NA NA NA

Hidd NA NA NA NA

Total 399,417 160,672 390,397 76.0%

20 RETAIL MARKET

Retail Lease Rates Declined Sharply in Most Areas Table 12 shows the comparison of retail Lease Rates across various areas between Sep-08 and Jun-09. Except for Isa Town, the Average Lease Rates have come down sharply across all areas.

Muharraq Incl. Amwaj Islands have witnessed a significant correction with the Average Lease Rate dropping by 59%, while the Seef District has undergone a correction of 24%.

The mall management companies have revisited their strategies and are now very keen to keep the malls fully leased out rather than trying to push up the Lease Rates as was the case up to mid 2008. The increase in Isa Town & Sitra average Lease Rate is on account of introduction of a high quality supply that was not present in the last data point.

In summary, the Retail Market rentals have come down sharply in line with the general correction that we have witnessed across all segments or the real estate industry.

Table 12: Prevailing Lease Rates in Bahrain Retail Market (Sep-08 – Jun-09)

Sep 2008 Jun 2009 % Change Seef District has in Average undergone a Rates correction of 24%. BD per Sq.m. (Sep 2008 – per month Maximum Minimum Average Maximum Minimum Jun 2009) Maximum Minimum Average Maximum Minimum Average

Central Manama 35 10 20 28 6 15 -25.0%

Seef District 40 15 25 40 8 19 -24.0%

Muharraq Incl. 25 20 22 16 6 9 -59.1% Amwaj Islands

Budaiya 20 15 17 18 8 13 -23.5%

Isa Town & Sitra 20 12 15 35 12 18 20.0%

Southern Governorate 14 10 12 NA NA NA NA

Hidd NA NA NA NA NA NA NA

21 Commercial Market Outlook COMMERCIAL MARKET

Commercial Market Outlook

We mentioned before that many companies that have a Poor infrastructure sizeable number of customer visits daily prefer to operate out planning and lack of of villas in Adliya, Mahooz, Um Al Hassam and Tubli. These are companies that are perfectly capable of taking up spaces coherent strategies are in the Seef District or Central Manama but due to the acute further squeezing the shortage of parking spaces and accessibility problems, their space consumption in demand is spilling over to the residential areas. the CBDs. Government agencies should play a more effective role in the master planning of prominent CBDs. They should also control the rampant practice of issuing commercial buildings approvals without the existence of adequate parking facilities and other amenities. The following issues need to be carefully considered in planning the prominent CBDs:

1. The accessibility issues must be addressed before giving Office Market the approval for any significant commercial buildings. The Office Market in Bahrain is undergoing an extraordinary 2. Revisiting the zoning allocated to various areas in Seef correction due to the sizeable magnitude of oversupply. We and Central Manama where the developments are taking have always held the view that the sustainable consumption place in haphazard manner. of the upcoming office space in the Kingdom is not very 3. Separating commercial and residential areas with likely as it has a small employment base. The oversupply was adequate allocation of public parking spaces. apparent even during the boom phase of the market and became crystal clear after the crisis. 4. Promoting the development of private sector multi-storey car park buildings through subsidies and incentives. One The problems are not just limited to the prevailing market such project in the Diplomatic Area is a major success for conditions. Poor infrastructure planning and lack of coherent the developer and more such projects are required. strategies are further squeezing the space consumption in the CBDs.

23 Commercial Market Review

We continue to hold This alone can unlock significant office space consumption a negative outlook potential even without any major change in the market conditions. The Kingdom has the potential to become a major for the Office regional business centre but it requires a more systematic Market, with further approach in order to realize that vision. price corrections. On the market side, we continue to hold a negative outlook with a significant potential for further price corrections. There is strong evidence that developers are resisting any downward price pressure. This will only delay the correction process and may not lead to any meaningful gains for the developers.

Retail Market The Retail Market has moved from a phase of untapped potential in mid 2008 to fully exploited potential by Jun-09. The Existing Stock in the Retail Market has increased by 62% over the last 3 quarters and may increase by another 40% over the next 2 quarters. Most new malls that have not yet begun operations may open with a 75% or less Occupancy Ratio. Proximity to As the supply of retail space increases, retailers are reporting nearby malls may lead to Occupancy Ratios falling in some of less than adequate sales levels and declining margins. This the established malls. only makes them reluctant to take any more spaces. We believe that the Retail market will only grow in sync with Fearing a general slowdown, many existing malls have begun the growth in the Resident Population and tourist arrivals . carving out a niche positioning. A prominent example is Dana The next big push for the Retail Market may come only when Mall that is now increasingly targeting the Asian expatriate the Qatar Causeway becomes operational. community.

24 Annexes ANNEXES

Annex 1: Why Bahrain!

Bahrain Registered 6.3% GDP Growth in 2008 Bahrain’s economy did remarkably well in 2008 even as the other regional economies struggled with growth. During the past year, GDP grew by 6.3%, which is a very healthy rate of growth. For 2009 also, the early economic signs are quite encouraging.

1. The employment base in Bahrain kept increasing in 2009. Chart A1 shows that the employment base (as per LMRA numbers) has touched almost 600,000 by the end of Q2 2009.

2. Chart A2 shows that despite dipping in Q2 2009, the employment growth remains in double digit.

When these employment numbers are viewed against the global economic backdrop of millions of job losses in the US, Europe and other regional economies, it shows how well the Kingdom’s economy has performed amidst very challenging times in the world. We remain positive on the long term economic outlook of Bahrain.

Chart A1: Yearly Employment Trend in Bahrain 2003-2009

599,017 578,307 503,784 460,265 418,172 373,309 331,379

2003 2004 2005 2006 2007 2008 Q2 2009

Source: Labour Market Regulatory Authority (LMRA)

Chart A2: Quarterly Employment Growth Rate in Bahrain 2003 - 2009

18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Q1 2003 Q4 2003 Q3 2004 Q2 2005 Q1 2006 Q4 2006 Q3 2007 Q2 2008 Q1 2009

26 ANNEXES

A Small yet Vibrant Economy in the Region

The Kingdom of Bahrain has one of the most vibrant and robust economies in the entire Gulf Region. Surprising as it may seem, despite being one of the smallest economies in the region, on a per capita GDP Bahrain is 4% higher than Saudi Arabia, which is the largest economy in the region. The real GDP growth rate averaged 6.7% between 2004 and 2007. The economy has drawn accolades from several observers and rating authorities due to the following reasons:

1. Successfully diversifying away from the dependence on oil: The oil sector contributes only 15% of GDP while the financial services sector contributes 26% and manufacturing contributes 16% (Chart A3).

2. Following prudent monetary policies that have resulted in a relatively low inflationary environment: Despite a pegged currency, in 2008 Bahrain had the lowest inflation rate compared to other economies in the region (Chart A4).

3. Bahrain is ranked as the freest economy in the region by the Heritage Foundation for 2007 and 2008 consecutively: It has a good combination of high business and investment freedom and an astute central bank. Also, the system is open to international arbitrage to settle any disputes and does not have any corporate tax except for that on oil companies (Chart A5).

4. Bahrain also has the most open economy in the region after the UAE: The Kingdom also enjoys a positive trade balance as its imports are valued lower than its exports (imports are at 54% of the GDP while exports reach 73% of the GDP). Furthermore, Bahrain is the only country in the region that has a Free Trade Agreement with the U.S., this has impacted the level of imports and exports as shown in (Chart A6).

Chart A3: GDP Breakdown (2007) Chart A4: Inflation in Gulf Region (2008)

Others 4% 15.0% Oil 15% 12.9% 11.2% 9.9% Manufacturing 16% 9.0%

Transportation & Commnunication 8% 4.5%

Trade 8% Real Estate & Business Activites 9% Finance Corporation 26% Bahrain UAE Saudi Kuwait Qatar Oman Govt. Services 14% Arabia

Source: Central Bank of Bahrain, 2008 Source: IMF & Various Central Banks, 2008

Chart A5: Index of Economic Freedom for Chart A6: Imports and Exports as % of GDP Countries in the Gulf Region (2007) for Countries in Gulf Region (2007)

72.2 Imports as % of GDP Exports as % of GDP

68.3 67.4 94% 73% 76% 62.8 62.8 68% 68% 62.2 60% 63% 54%

34% 36% 26% 30%

Bahrain UAE Saudi Kuwait Qatar Oman Bahrain UAE Saudi Kuwait Qatar Oman Arabia Arabia

Source: The Heritage Foundation, 2008 Source: World Bank, 2008 27 COMMERCIAL MARKET

No Oil; No Problem It is important to elaborate on the significance of Bahrain’s non-dependency on oil. The Kingdom has turned it into a blessing in disguise by successfully creating a sustainable economic model based on high value-adding elements such as finance and manufacturing.

Bahrain is recognized as the region’s centre for Islamic finance. In 2001, Bahrain was the first to develop PIRI regulations specific to the Islamic banking industry. Bahrain’s Central Bank was also the first to develop and issue Sukuk products in 2001. In 2005 Bahrain again led the field by creating the first ever comprehensive regulatory framework specific to Takaful and re- Takaful companies. Consequentially, it’s not surprising that Bahrain has the highest number of Islamic Finance institutions in the MENA region.

A recent report by the conference board of an independent American economic think-tank points out that the Kingdom’s economy is not completely dependent upon either capital deepening or labour force accumulation. In laymen terms, that means the economy is not entirely dependent on setting up more plant and machinery or employing more labour force for sustained growth. The same set of workers produces more output with the same set of plants and machineries. Thus the economy has a solid structural economic growth driver in productivity and efficiency improvement. This helps companies generate higher profitability with constant resources and thus they can increase employee salaries progressively; a win-win situation.

Bahrain Vision 2030: Focus on High Value Adding Sectors Bahrain’s government is preparing a 2030 vision document for the economy where it has identified the following focus areas: 1. Financial Services – Bahrain has already established its pre-eminent position in financial services and Islamic finance areas. The government plans to strengthen this position by introducing comprehensive Basel II compliant regulations for Islamic Financial institutions. 2. Business and Professional Services – Due to rapidly growing sectors such as real estate, telecommunications, tourism and manufacturing across the region, the demand for business and professional services has been increasing. Bahrain with its strategic location, free business environment and cosmopolitan lifestyle can take advantage of this opportunity. The excellent connectivity through road, air and sea offers opportunities for the companies to develop a logistics hub to serve the entire Gulf region. 3. Information Communication Technology – IT spending in the Gulf region is expected to cross USD 9 billion by the end of 2008. Bahrain shares some of the key attributes that may help it evolve as a preferred destination by IT companies. Office lease rentals are low and general wage levels are also significantly lower than that in its neighbours. 4. High Value Manufacturing – With no corporate tax structure, low labour cost and excellent infrastructure, Bahrain offers potential for high value added manufacturing, particularly in automotive and aluminium downstream manufacturing industries.

1The Prudential Information and Regulatory Framework (PIRI) is a set of regulations which over capital adequacy, asset quality, management of laibilities and corporate governance.

28 ANNEXES

Annex 2: Definitions of Terms

• Average Lease Rate – The average lease rate is the • Leasehold – A supply is categorised as leasehold when weighted average lease rate against the unleased stock it is available only on lease basis from the developer. For (refer to the definition of “Leased Stock” below). The such properties, even when it is occupied by a lessee unit of measure is usually BD / sq.m. per month. In (the entity / person leasing the premise), the ownership many cases, the minimum and maximum lease rates remains with the developer. are also given. • Lease Rate – It is the monthly rent that a tenant pays • Central Business District (CBD) – The Central for using a commercial premise. It is measured against Business Districts are the areas where there is significant sq.m. of leasable area. concentration of government and corporate office • Leased Stock – It is defined as the leased out part of buildings. There may be more than one CBD in any city the Active Marketable Supply and Existing Stock. / country. For example Bahrain has two important CBDs - the Diplomatic Area and the Seef District.

• Commercial Market – The Commercial Market is the combination of Office Market and Retail Market, which are defined in this section.

• Existing Stock – The definition of existing stock varies for the Office market and the Retail Market to account for the inherent differences between the two.

• Office Market – An office property is considered part of existing stock only after the supply is consumed once at the developer’s level through leasing or sale to an end-user. If a property is sold by the developer to another property investor, it is still treated as Marketable Supply until it is fully consumed through leasing or sale to an end-user. • Marketable Supply – All properties (office and retail) • Retail Market – Unlike the office market, a retail that are currently under construction and have not property is considered part of existing stock the been shifted to Existing Stock are treated as Marketable moment it is open for consumers without regards Supply. It is further subdivided into two categories: to its occupancy status. Thus, even if a mall opens • Active Marketable Supply – That part of with just 50% Occupancy Ratio, from that moment Marketable Supply where the developer is actively onwards it is treated as Existing Stock. trying to lease or sell the space. To judge the • Freehold – A supply is categorised as freehold when it consumption of space, only this part of Marketable is available for outright purchase from the developers. Supply is considered. Once purchased, the ownership of the property is • Passive Marketable Supply – That part of transferred to the buyer. Marketable Supply where the developer has not • Gross Leasable Area (GLA) – It is sum of leasable begun efforts on either leasing or selling. areas within a shopping mall (net of common areas). • Occupancy Ratio – This ratio is calculated by dividing • Inventory – It is that part of Active Marketable Supply the Leased Stock with total stock available for leasing. that is not yet been consumed through leasing or sale This can either be Active Marketable Supply, Existing to an end user. Stock or the combined number.

29 ANNEXES

• Office Market – In this report, this term refers to the • Residential Market – This term refers to all the collection of office buildings across all grades. Office residential projects across the country that are under properties range in grade (A, B, C & Other Classes) development or at planning stage. It doesn’t include according to a combination of location and physical the projects that are fully constructed, sold and handed characteristics. over to the customers.

• Class A – office buildings usually have excellent • Retail Market – In this report, the term refers to location and access (within or close to CBDs), the collection of covered shopping malls. There is of attract high quality tenants, and are managed course a wide range of retail offerings that range from professionally. They are often occupied by banks, open-air public markets, to high street retail strips to investment firms and professional companies. out-of-town factory outlets to fully covered shopping malls. Shopping malls are the fastest growing type due • Class B – buildings have good (versus excellent) to the comprehensive and controlled nature of their locations, management, and construction, and management. tenant standards are high. They have very little functional obsolescence and deterioration. • Under Construction – That part of Marketable Supply that is still being constructed and hence is not available • Class C – buildings are typically 15 to 25 years old for operations. but are maintaining steady occupancy.

• Other Classes – Office buildings of other classes are not in established business districts and they often lack basic amenities such as adequate parking, proper entry & exit points, lift lobby, etc. Moreover, after completion they are not managed professionally and thus deteriorate fast.

• Proposed Supply – This is the supply in the pipeline which is planned and announced but not yet launched. We track only those projects for which firm plans are drawn and a tentative marketing timeline is decided. At the time of any market survey, there are several projects on the drawing board for which the supply cannot be estimated with any degree of certainty and thus these are left out. These projects are tracked when they reach an advanced stage of planning.

• Ready for Operation – That part of Marketable Supply that is now fully constructed and is now available for operations.

• Resident Population – This refers to the total population that resides in Kingdom of Bahrain. It includes the Bahraini population and the expatriates working in the country.

30 ANNEXES

Annex 3: Area Definitions

Budaiya – Budaiya is the North-Western part of Bahrain and in our definition includes Saar, Al Jasrah, Janabiya and Buguwa.

Central Manama – Central Manama includes the Diplomatic Area and extends to Bab-Al-Bahrain and the locations on both sides of the King Faisal Highway. Currently the area includes almost all of the occupied and operational commercial office space and is the centre of all economic activities. Diplomatic Area is the most concentrated Central Business District (CBD) in the Kingdom. The other prominent business centres - Bahrain Financial Harbour and Bahrain World Trade Centre – also fall within Central Manama. The Diplomatic area also has the majority of the existing 5 Star hotels; notable exceptions include the Ritz Carlton, Banyan Tree, and the Movenpick.

Hidd – It is primarily an industrial area with very limited residential supply. The biggest private sector real estate project in Hidd is the Bahrain Investment Wharf (BIW) which has been master planned to facilitate the development of small to medium sized industrial and logistic enterprises. involve such large scale reclamation work. For commercial Additionally, Hidd also covers Bahrain International reviews, Muharraq and Amwaj Islands are discussed together Investment Park (BIIP) & Bahrain Logistics Zone (BLZ). as one area as there is not much commercial supply in the two areas separately. Isa Town – It is located close to Riffa and includes locations of Tubli, Sanad, Jidd Ali Sitra & East Riffa. Seef District – The Seef District is adjacent to Central Manama and also includes Sanabis. It is an established retail Juffair – Although from an administrative point of view, destination with 5 operational malls and the international Juffair falls within the Manama district, we have defined it as exhibition centre. a separate area in this report. Juffair has distinctively different market dynamics compared to the rest of Manama. Juffair is Southern Governorate – The Southern Governorate refers the Eastern part of the capital and is mostly a residential to the areas of West Riffa, Al Areen and Durrat Al Bahrain area. It’s located nearby the US Navy 5th Fleet‘s Base and is which have been clubbed under this name. a preferred area of residence for most expatriates from the US and Europe. Southern Manama – The area of Southern Manama include locations such as Hoora, Adliya and Um Al Hassam and Muharraq (Including Amwaj Islands) – Muharraq Mahooz. This area is treated independently of Central Manama (Including Amwaj Islands) is located on the North-Eastern and Juffair as it differs significantly in its real estate character. side of the Kingdom and houses Bahrain International Airport. Amwaj Islands are a mixed-use master-planned community. It was the first project of its kind in Bahrain to

31 ANNEXES

Annex 4: Data Sources and the Structure of the Database

The data presented in this report is collected through extensive Profile: Liases Foras Middle East (www.lfme.com.bh) primary surveys. The most important feature of our database Liases Foras Middle East (LFME) is a specialized firm on real is its extent of coverage. We understand that real estate is a estate research and advisory services. The firm is incorporated very localized subject and every micro market exhibits distinct in the Kingdom of Bahrain with a vision to create the most character in terms of supply, demand and prices. Thus, we comprehensive database on Middle East and North Africa take a very broad sample of the market with near universal (MENA) property markets and offer the highest quality coverage of the principal categories. Our sampling approach research & advisory services in real estate. is defined below. LFME has pioneered a unique approach to create scientific For Office Market: real estate database that provides accurate estimates of • We maintain universal coverage (100% coverage) of Class demand, supply and prices at micro market level. We carry A Marketable Supply but employ sampling approach for out periodic ground surveys with near universal coverage to Marketable Supply in other classes. For Jun-09 data set, collect data on four major real estate markets: we achieved close to 65% coverage of Marketable Supply in classes other than Class A. 1. Residential Market • We maintain about 30% coverage of the Existing Stock 2. Rental Market for the purpose of collecting information on Lease Rates. 3. Office Market This coverage is judiciously distributed across all areas to 4. Retail Market capture the trends in Lease Rates. The output of the exercise is REMI (for Real Estate • For Jun-09 data set, we tracked 63 office projects in Market Intelligence), which is used by real estate Marketable Supply and 25 projects in Existing Stocks companies and financial institutions to get complete across Bahrain. information on the market conditions.

For Retail Market: LFME offers a wide variety of services that include We maintain universal coverage of Marketable Supply and REMI Subscription, Research Services and Power Existing Stock. In total we tracked 38 retail projects for Jun- Brokerage Services 09 data set.

Each project is entered in the database with its road address, location and suburb (in case of Bahrain it is Governorate). All projects are summed up location-wise to form the supply of that location. In turn, the locations are summed up to arrive at the supply numbers of suburbs and so on. This bottoms-up approach provides a high degree of flexibility in reading the data at any level.

Another important feature of the database is the timeline approach. Each project is tracked with its timeline of supply and sales. These timelines assist us in measuring the pace of supply and sales at various points to generate comparisons over a period of time.

The cut off date for our Jun-09 data set is July 28th, 2009.

32 Profiles PROFILES

RealCAPITA

Established in the Kingdom of Bahrain on April 2006 as a closed share holding real estate company, RealCAPITA is the alternatively new real estate investment firm based in Bahrain. With an authorized capital of US$ 200 million, and a paid up capital of US$ 64 million, RealCAPITA is considered one of the largest institutions of its kind in Bahrain. Its core strategy is grounded in understanding real estate fundamentals and transacting sound deals based on this knowledge. This strategy is vital for surviving the highly competitive operating environment which favours institutions with superior knowledge, resources and value added capabilities. RealCAPITA’s true strength is in its team of industry leaders with a proven track-record in acquisitions, finance, institutional asset management, concept development and project management.

Since its establishment in 2006, RealCAPITA has been able to successfully develop and structure real estate transactions valued at almost US$ 3 billion. The following is a list of projects already undertaken by RealCAPITA:

Amwaj Gateway Developing six 20-story residential towers and townhouses which are located at the entrance of Amwaj Islands. The development shall accommodate 550 units within a gated community supported by a wide range of amenities. The project has been awarded the 1st Green Buildings Award in Bahrain reflecting its notable efforts to promote energy efficiency from the design stage to final implementation.

RealLANDS RealLANDS is a Bahrain-based company managed and run by RealCAPITA that has been engaged in acquiring plots of lands across the Kingdom of Bahrain and the MENA region. It has a paid-up capital of US$ 25 million.

RealGARDENS Developing 47 luxury villas for sale located in Al Jasra. The development also houses several swimming pools, tennis courts, a health club and a playground for kids. Al Jasra is an exclusive residential area that attracts the upper-end of society.

RealSUITES Developing two 12 storey luxurious towers situated in Um Al Hassam, Bahrain. The intention is to develop the properties for rental income. The central locality of the project, high demand and limited availability of high-end apartments in the area positions it to attract strong returns to investors.

34 PROFILES

Injaz Asia The establishment of Injaz Asia as a property fund focusing on investing in the real estate market in both developing and emerging economies in South East Asia. The fund is dedicated to invest directly in opportunistic property assets in Singapore, Hong Kong and Malaysia among other key cities in Asia. Its strategy will seek to acquire, own and manage distressed and undervalued properties in prime locations with high potential for value appreciation through tactical turnovers.

RealRESIDENCE This development of eight 6-storey buildings (each with a unique façade) will be located in the newly residential zoned Al Hidd area. The project will provide 144 high standard units for sale. The Al Hidd area is witnessing rapid developments, as it prepares to house Bahrain’s largest commercial sea port with supporting industrial and commercial facilities.

RealMAROC This development of 13,000 lower-middle affordable housing units in major Moroccan cities will be carried out in partnership with a leading Moroccan developer, Jet Group, our country partner. Jet Group has a long track record in developing affordable housing of the highest quality in their class, backed by strong control of their supply chain.

RealPALAIS Developing eleven 3-4 storey buildings with the cost of Euro 50mn that offers 182 luxurious residential units .The property is located close to the city of “Saint-Julien-en-Genevois” on the French side of the Swiss-French borders. Providing an extremely attractive location due to it’s close proximity to Geneva(8 km).

Bait Al Mal Al Khaleeji The establishment of a non-banking financial services firm in Saudi Arabia along with 4 partners (2 of which are GCC-based financial institutions). The company intends to offer premium wealth management, brokerage and corporate finance services to high net worth Individuals and corporate clients in Saudi Arabia. The company will be headquartered in Dammam, with offices in Riyadh and Jeddah.

35 PROFILES

Bahrain Logistics Company The company will offer logistic, warehousing and transport services. The company brings together leading logistics partners in Bahrain and the GCC including Yousif Bin Ahmed Kanoo, BANZ and TRAFCO. The company will operate out of the industrial zone in Hidd area and will extend operation to the Eastern Province in Saudi Arabia within the second year of operations.

RealJUBAIL The establishment of a real estate development company focusing on residential properties in the city of Jubail. Jubail is a global player in the petroleum industry and suffers from a severe shortage of residential units. RealJUBAIL will address this attractive market need and will also benefit from the effect of well-supported housing programs run by most industrial employers.

Tangier Investment Park Establishment of an industrial/logistics community in Tangier. The city is going through an industrial expansion supported by new port facilities, road and railway infrastructure. The development covers an area over 250 hectares and TIP will involve various components. Medium and light industries and logistic facilities are the core components supported by a high-end office park, commercial outlets, and civic amenities.

RealVIEWS Developing a luxurious 22-storey high residential tower on Al Fateh Highway, at the heart of the Capital Manama. The tower will deliver premium residential apartments and the most exclusive sky villa in Bahrain. The tower has uninterrupted sea views from the north-east, east and south-east sides.

36 PROFILES

Profile: Liases Foras Middle East (www.lfme.com.bh)

Liases Foras Middle East (LFME) is a specialized firm on real estate research and advisory services. The firm is incorporated in the Kingdom of Bahrain with a vision to create the most comprehensive database on Middle East and North Africa (MENA) property markets and offer the highest quality research & advisory services in real estate.

LFME has pioneered a unique approach to create scientific real estate database that provides accurate estimates of demand, supply and prices at micro market level. We carry out periodic ground surveys with near universal coverage to collect data on four major real estate markets:

1. Residential Market

2. Rental Market

3. Office Market

4. Retail Market

The output of the exercise is REMI (for Real Estate Market Intelligence), which is used by real estate companies and financial institutions to get complete information on the market conditions.

LFME offer offers a wide variety of services that include REMI Subscription, Research Services and Power Brokerage Services

37 PREVIOUS ISSUES

BAHRAIN

3rd Quarter 2008

1. RealOUTLOOK 2. RealOUTLOOK 3. RealOUTLOOK Residential Q3 2008 Commercial Q3 2008 Residential Q4 2008

4. RealOUTLOOK 5. RealOUTLOOK 6. RealOUTLOOK Rental Q1 2009 Residential Q1 2009 Residential Q2 2009

DISCLAIMER

This report was produced by RealCAPITA and Liases Foras for general information only.

As a general report, this material does not necessarily represent the view of RealCAPITA or Liases Foras in relation to particular properties or projects.

Information and opinions contained herein have been complied or arrived by RealCAPITA and Liases Foras from sources believed to be reliable, however both RealCAPITA and Liases Foras do not hold any legal responsibility due to the fairness, accuracy, completeness or correctness of the information and opinions contained in this document.

No warranty or representation, express or implied, is made to the accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other conditions, withdrawal without notice, and to any special listing conditions otherwise imposed.

This document is not intended to take into account any investment suitability needs of the recipient. In particular, this document is not customized to the specific investment objectives, financial situation, risk appetite or other needs of any person who may receive this document. RealCAPITA and Liases Foras strongly advise every potential investor to seek professional legal, accounting and financial guidance when determining whether an investment in real estate is appropriate to their needs.

38 قطاع العقار التجاري

نظرة م�ستقبلية لقطاع العقارات املكتبية والتجارية يف البحرين: 1 . قطاع العقار املكتبي 2 . قطاع العقار التجاري من الوا�ضح للعيان �أن قطاع العقار املكتبي يف البحرين مير على الرغم من �أن �أداء �سوق العقار التجاري كان الأف�ضل ً حاليامبرحلة من الت�صحيح اجلذري نتيجة الزيادة الكبرية بني جميع القطاعات العقارية الأخرى, �إل �أننا نتوقع يف كمية العر�ض, حيث تفوق مبراحل م�ستوى الطلب يف �إ�ستقرار ن�شاط البناء و التو�سع يف هذا القطاع على املدى ال�سوق. وقد �ساهمت الأزمة املالية العاملية يف زيادة حجم القريب, ويرجع ذلك اىل و�صول ال�سوق اىل حالة الت�سبع امل�شكلة. كما يعاين هذا القطاع من �سوء التخطيط فيما مع عدم حدوث زيادة ملحوظة يف �أعداد زوار اململكة يتعلق بالطرق امل�ؤدية اىل املناطق الدارية الرئي�سية وندرة خالل الأعوام القادمة. وقد لحظنا وجود �شكاوى من مواقف ال�سيارات بالإ�ضافة اىل الإختناقات املرورية, مما امل�ست�أجرين نتيجة قلة املبيعات و �إنخفا�ض الأرباح. كما �أدى اىل �إنتقال العديد من ال�شركات اىل مناطق ذات لحظنا �أن العديد من املجمعات التجارية اجلديدة قد تكد�سات مرورية �أقل مثل �أم احل�صم و العدلية. وهنا ي�أتي �أفتتحت م� ًؤخرا بينما ن�سب الإ�شغال بها تبلغ %75 �أو دور الأجهزة احلكومية املعنية بلعب دور �أكرب يف تنظيم �أقل. ونتيجة لهذه احلالة من الت�شبع يف ال�سوق ف�إن �أي وتخطيط الإ�سرتاتيجيات املتعلقة بهذا القطاع احليوي. منو يف حجم قطاع العقار التجاري �سيكون ًمرتبطا بزيادة ًوبناءا عليه, ف إن� نظرتنا امل�ستقبلية لهذا القطاع ل تزال �أعداد زوار اململكة. وبالتايل ف�إننا نتوقع �أن القفزة القادمة �سلبية على املدى القريب, مع توقع مبزيد من الإنخفا�ض لهذا القطاع العقاري لن حتدث �إل بعد �إفتتاح ج�سر املودة يف الأ�سعار. بني مملكة البحرين و قطر.

39 قطاع العقار التجاري

• ومبزيد من التحليل جند �أن هذا التباط�أ يف منو �أعداد الزوار • وقد متثل هذا الإهتمام بت�شييد امل�شاريع التجارية �ضمن قد بد�أ ي�ؤثر بالفعل على دميوغرافية وطبيعة توزيع املجمعات املناطق ذات الكثافة ال�سكانية املحلية برتكز كل املعرو�ض التجارية يف اململكة. فقد حتول الإهتمام ببناء املجمعات يف ال�سوق “Marketable Supply” �ضمن القطاع التجاري التجارية ال�ضخمة يف الأماكن التي يرتدد عليها زوار اململكة يف مناطق و�سط املنامة, املحرق, جزر �أمواج, البديع, مدينة من اململكة العربية ال�سعودية والكويت مثل منطقة ال�سيف, عي�سى, �سرتة و احلد. فيما �إ�ستحوذ نحو %80 من حجم اىل بناء املجمعات التجارية املتو�سطة احلجم يف الأماكن القطاع التجاري امل�ستخدم “Existing Stock” يف منطقة ذات الكثافة ال�سكانية املحلية مثل الرفاع, عايل, املحرق ال�سيف. وقد لحظنا �أن �أكرب جتمع من امل�شروعات واحلد. وتتميز هذه امل�شروعات ب�صغر حجمها ن�س ًبيا حيث امل�ستقبلية “Proposed Supply” موجود يف املحافظة تكفي بالكاد ل�سوبرماركت كبري و نحو 50 ً حمال ًجتاريا اجلنوبية �ضمن م�شروعات العرين �إل أن� هذه امل�شروعات بالإ�ضافة اىل ردهة للمطاعم ال�سريعة. متوقفة ً حالياويوجد الكثري من ال�شك حول �إ�ستكمال بنائها يف امل�ستقبل.

ن�سبة التغري �إجمايل �سبتمرب 08 يونيو 09 (�سبتمرب 08 - يونيو 09) املعرو�ض

و�سط املنامة 35,045 92,548 21,000 148,593

�ضاحية ال�سيف 320,097 - - 320,097

املحرق )ت�شمل جزر �أمواج( 5,404 49,654 40,000 95,058

البديع 11,399 4,500 16,200 32,099

مدينة عي�سى و �سرتة 27,473 88,970 - 116,443

املحافظة اجلنوبية - - 269,691 269,691

احلد - 17,500 43,506 61,006

املجموع 399,417 253,172 390,397 1,042,986

• وت�شري البيانات اىل �أن ن�سب الإ�شغال يف منطقة ال�سيف ل املقبولة حيث تراوحت بني 40اىل %75. وت�ؤكد هذه الأرقام تزال هي الأعلى يف اململكة حيث بلغت %96يف منت�صف توقعاتنا ب�أن �سوق العقار التجاري يف البحرين قد و�صل اىل 2009, و�إن كانت م�صادرنا ت�شري اىل عدم ارتياح امل�ست�أجرين مرحلة الت�شبع و�أنه ل يوجد توقعات ب�إ�ستمرار املزيد من من قلة املبيعات من جهة بالإ�ضافة اىل �إرتباطهم بعقود النمو يف هذا القطاع. طويلة الأجل من جهة �أخرى. وعلى ال�صعيد الآخر, ف�إن ن�سب الإ�شغال يف املناطق التجارية اجلديدة ما زالت دون

40 قطاع العقار التجاري

�أهم املالمح احلالية لقطاع العقار • ظل القطاع التجاري من �أكرث القطاعات العقارية �إ�س ًتقرارا خالل الفرتة ال�سابقة, و�إن كانت الدلئل ت�شري اىل �أن ال�سوق التجاري يف البحرين: قد و�صل اىل مرحلة الت�شبع, و�أن طرح املزيد من امل�ساحات • ي�شمل قطاع العقار التجاري عدة �أنواع من امل�ساحات التجارية التجارية يف امل�ستقبل القريب �سي�ؤدي بال�ضرورة اىل الت�أثري مثل الأ�سواق ال�شعبية و املحالت التجارية على ال�شوارع على الأ�سعار ون�سب الإ�شغال يف املجمعات التجارية. الرئي�سة بالإ�ضافة اىل املجمعات التجارية. وتعترب املجمعات التجارية من �أ�سرع امل�ساحات التجارية �إنت�ش ًارا و�أكرثها ًجذبا • وت�شري البيانات اىل �أن حجم القطاع التجاري امل�ستخدم يف للزبائن ًنظرا للخدمات امل�ساندة املتوفرة بها, كاملطاعم ال�سوق ًحاليا قد �إزداد بن�سبة %61.7خالل الفرتة )�سبتمرب ومراكز �ألعاب الأطفال وطاقم العمل التخ�ص�ص ب�إدارتها. 2008 – يونيو 2009( ليبلغ 399,417 مرت مربع, حيث مت �سرنكز �ضمن هذا التقرير على املجمعات التجارية فقط �إ�ستهالك ن�سبة كبرية من املعرو�ض احلايل يف ال�سوق خالل ًنظرا لدورها البارز يف �سوق العقار املحلي. هذه الفرتة. بينما �إنخف�ض حجم امل�شروعات امل�ستقبلية بن�سبة %48.6خالل الفرتة ذاتها لي�صل اىل 390,397مرت مربع.

ن�سبة التغري �سبتمرب 08 يونيو 09 (�سبتمرب 08 – يونيو 09) العقارات امل�ستخدمة3 - �أ 247,065 399,417 61.7% املعرو�ض احلايل - ب 334,805 253,172 -24.4% امل�شاريع امل�ستقبلية - ج 760,022 390,397 -48.6% �إجمايل العر�ض - ) �أ + ب + ج( 1,341,892 1,042,986 22.3% -

• وت�شري هذه الدلئل اىل �أن �أداء القطاع التجاري كان ًجيدا التجاري, وت�أتي غالبية الأعداد الزائرة من اململكة العربية خالل الفرتة املذكورة, واىل �أن ال�سوق قد بلغ مرحلة الت�شبع ال�سعودية ودول اخلليج املجاورة عرب منفذ ج�سر امللك فهد. ًحاليا. يجب العلم ب�أن هذا القطاع يعتمد على القدرة وت�شري البيانات اىل �أن النمو املطرد يف �أعداد زوار اململكة ال�شرائية لكل من �سكان و زوار اململكة. فالبن�سبة لل�سكان, خالل الأعوام املا�ضية قد تباط أ� ب�شكل حاد خالل عام 2009, ف�إن البيانات الر�سمية لتعداد �سكان اململكة لعامي -2008 حيث بلغت ن�سبة النمو %3.4 فقط مقابل %17خالل العام 2009 مل تطرح حتى الآن, وكان تعداد ال�سكان قد بلغ نحو ال�سابق. و�سيكون لهذا التدين يف �أعداد الزائرين �أثر �سلبي مليون ن�سمة خالل عام 2007. ومن ناحية �أخرى, يعد عدد على الن�شاط التجاري يف اململكة والذي �سينعك�س �س ًلبا بدوره الزوار الهائل للمملكة من �أهم عوامل دعم منو القطاع على حركة القطاع العقاري التجاري.

3العقارات امل�ستخدمة:يختلف تعريف هذا امل�صطلح بني القطاع املكتبي و القطاع التجاري: 1 .القطاع املكتبي: يعترب العقار املكتبي عقار م�ستخدم �إذا مت بيع �أو ت�أجري كل امل�ساحات املعرو�ضة على �أفراد �أو �شركات تنوي ا�ستخدامها. �إذا مت بيع العقار على م�ستثمر ينوي الت�أجري �أو البيع يعترب هذا العقار �ضمن املعرو�ض احلايل. 2 .القطاع التجاري: يعترب العقار التجاري عقار م�ستخدم عندما يفتح �أبوابه للزبائن بغ�ض النظر عن ن�سبة ال�شغال. �إذا مت افتتاح جممع جتاري ل تتجاوز ن�سبة ال�شغال فيه %50فهو يعترب عقار م�ستخدم و ل يحت�سب �ضمن املعرو�ض احلايل.

41 قطاع العقار التجاري

• وترتبط معدلت �إ�ستهالك العقار املكتبي � ًإرتباطا ًوثيقا العديد من امل�شكالت التي تتعلق باحلركة املرورية, كالكثافة مبعد تل منو ن�سب العمالة. وت�شري البيانات اىل �أن معدل منو املرورية العالية و قلة مواقف ال�سيارات و�سوء التخطيط. ولذا العمالة يف مملكة البحرين قد �إنخف�ض من %17.8 �س ًنويا ف�إن العديد من ال�شركات وباخل�صو�ص التي يق�صدها العديد خالل عام 2008 ليبلغ %7.9 لغاية الربع الثاين من عام من العمالء تف�ضل العمل يف فيلل م�ستقلة يف مناطق �سكنية .2009 ولذا, فمن املتوقع �أن ت�ؤثر هذه النتائج �س ًلبا على �أداء مثل العدلية واملاحوز و�أم احل�صم. �سوق العقار املكتبي يف امل�ستقبل القريب. • وقد حاولنا ح�صر بيانات �أ�سعار العقارات املكتبية يف �أهم املناطق الإدارية يف البحرين, ولكن ذلك مل يكن ًممكنا لعدم • ما زال مفهوم التمليك “Freehold” حديث ن�س ًبيا يف اململكة حدوث معامالت بيع و�شراء كما �أ�سلفنا. �إ�ضافة اىل ذلك, ويف طور الإختبار, حيث يعترب الكثري من امل�ستثمرين هذه مل يتجاوب عدد من املطورين مع الإ�ستبيان بغر�ض احل�صول العملية حمفوفة باملخاطر و لها الكثري من املتطلبات مثل على هذه الأ�سعار. ً وبناءاعليه, مت تقدير القيمة العادلة “Fair اخلربة يف �إدارة العقارات “Property Management”. ”Value وقد �ساهمت الأزمة املالية يف توجيه �ضربة قا�صمة اىل لالأ�سعار ب�إ�ستخدام معدلت الإيجارات ون�سب الإ�شغال فكرة التمليك �ضمن القطاع املكتبي, حيث متت �إعادة معظم يف �أهم املناطق الإدارية. وقد بلغت القيمة العادلة للمرت املربع الوحدات املكتبية املباعة خالل الفرتة ال�سابقة, بالإ�ضافة يف املنطقة الدبلوما�سية 941 ً ديناراللمرت املربع, لرتتفع اىل اىل �إنعدام حركة العر�ض و الطلب على متلك وحدات مكتبية 1,188 ً ديناراللمرت املربع يف منطقة ال�سيف, وتبلغ �أق�صى قيمة يف ال�سوق ًحاليا. لها يف منطقة �شارع امللك في�صل مبعدل 1,470 ً ديناراللمرت املربع. ونالحظ �أن هذه املعدلت �أقل بكثري عما كانت عليه • تعد منطقتي ال�سيف وو�سط املنامة �أهم املناطق الإدارية يف خالل �شهر �سبتمرب 2008, حيث �أن �أن�شطة امل�ضاربة خالل مملكة البحرين, حيث ترتكز بهما معظم ال�شركات وامل�ؤ�س�سات عامي 2006 و 2007 �أدت اىل �إرتفاع �أ�سعار الأرا�ضي ب�صورة املالية. وتبلغ ن�سبة الإ�شغال يف منطقة ال�سيف %69, بينما مبالغ فيها. وقد لوحظ �إنخفا�ض �أ�سعار الأرا�ضي ب�شدة خا�صة ترتفع هذه الن�سبة اىل %80 مبنطقة و�سط املنامة. وعلى يف منطقة ال�سيف حيث تراوحت بني 50 اىل 60%. الرغم من �أهمية هاتني املنطقتني, �إل �أنهما تعانيان من

42 قـطاع العـقار املـكــتبى

• وجتدر الإ�شارة اىل �أن �إنخفا�ض املعرو�ض من العقارات %33.5 ليبلغ 259,170مرت مربع, نتيجة م�ساع حثيثة من املكتبية يف ال�سوق هو تطور �إيجابي من حيث �إعادة التوازن مطوري امل�شاريع املكتبية لت�سويقها. وكنتيجة حتمية لهذه اىل ال�سوق, فال يزال العر�ض يفوق م�ستوى الطلب مبراحل. التطورات, فقد �إنخف�ضت ن�سبة الإ�شغال “Occupancy وعلى الرغم من ذلك فقد لوحظ �إرتفاع اجلزء الن�شط من Ratio” لهذا اجلزء من املعرو�ض يف ال�سوق من 77% املعرو�ض احلايلActive Marketable Supply“ 1” بن�سبة خالل �شهر �سبتمرب 2008اىل %48خالل يونيو 2009.

ن�سبة التغري �سبتمرب 08 يونيو 09 (�سبتمرب 08 – يونيو 09) املعرو�ض احلايل 454,053 396,323 -12.7% - اجلزء الن�شط 187,334 250,170 33.5% - اجلزء غري الن�شط 266,719 146,153 -45.2%

• ومن املتوقع �أن ت�ستمر ن�سب الإ�شغال يف الإنخفا�ض خالل لعدم �إزدياد الطلب يف ظل الظروف الإقت�صادية احلالية. الربعني القادمني, حيث من املنتظر �أن يتم طرح 42,000 لذا, ف�إنه من املتوقع �أن ت�ستمر حالة الركود للقطاع املكتبي مرت مربع من العقارات املكتبية حتت الإن�شاء ًحاليا, نظرا يف الفرتة املقبلة.

ن�سبة التغري �سبتمرب 08 يونيو 09 (�سبتمرب 08 – يونيو 09) املعرو�ض احلايل الن�شط 187,334 250,170 33.5% - املعرو�ض امل�ؤجر 144,329 113,147 -21.6% - ن�سبة ال�شغال 77.0% 45.2% - - املخزون2 43,005 137,023 218.6%

1املعرو�ض احلايل:هو جمموع كل العقارات املكتبية و التجارية التي ل تزال يف طور الن�شاء و يتفرع اىل جزئني 1 (اجلزء الن�شط: و هو اجلزء الذي ي�سعى املطور فيه اىل ت�سويق امل�ساحات بنمط البيع �أو الت�أجري 2 (اجلزء غري الن� ط:ش و هو اجلزء الذي مل يبد�أ املطور بت�سويقه بعد 2املخزون: هو اجلزء غري امل�ؤجر �أو املباع من املعرو�ض احلايل

43 قـطاع العـقار املـكــتبى

ي�سعدنا يف �شركة ريل كابيتا �أن نطرح التقرير ال�سابع اخلا�ص • كان لالأزمة املالية العاملية ت�أثري �سلبي وا�ضح على قطاع العقار ب�سوق العقار البحريني �ضمن �سل�سلة تقارير RealOUTLOOK املكتبي بدا ًجليا �أكرث من باقي القطاعات العقارية. ويعود التي تتناول �أربع قطاعات رئي�سية �ضمن ال�سوق العقاري )القطاع ال�سبب يف ذلك اىل ال�صلة املبا�شرة بني قطاع العقار املكتبي ال�سكني, التجاري, املكتبي, الإيجارات(. هدفنا من خالل هذه و امل�ؤ�س�سات املالية التي تعد من �أكرب ال�شرائح امل�ستهلكة التقارير هو مواجهة النق� صاحلاد يف البيانات والإح�صائيات لهذا القطاع. ُ وبناءاعليه, فقد مت ت�سجيل �إنخفا�ض ملحوظ املتعلقة بال�سوق العقاري ب�شكل عام, �إذ ن�سعى من وراء ذلك يف الطلب على امل�ساحات املكتبية يف الفرتة الأخرية. مل�ساعدة امل�ستثمرين واملهتمني بهذا ال�سوق على �إتخاذ قرارات �إ�ستثمارية �صحيحة مبنية على معلومات �سليمة وموثقة. • ت�شري البيانات �أن حجم العقارات املكتبية امل�ستخدمة “Existing Stock” قد �إرتفع بن�سبة 15% خالل الفرتة ويعترب هذا التقرير الإ�صدار الثاين لتقرير القطاعني املكتبي و )�سبتمرب 2008 – يونيو 2009( ليبلغ 507,295 مرت مربع, التجاري. و يقدم هذا التقرير ًحتليال ًوافيا للقطاعني املكتبي و بينما �إنخف�ض املعرو�ض احلايل “Marketable Supply” التجاري خالل الربع الثانى من عام 2009. بن�سبة 11% ليبلغ 403,600 مرت مربع خالل الفرتة ذاتها, حيث مت حتويل عدد من امل�شاريع املكتبية اىل وحدات �سكنية �أهم املالمح احلالية لقطاع العقار املكتبي �أو فندقية بينما مت ت�أجيل بع�ض امل�شروعا ت الأخرى. يف البحرين: • كذلك ت�شري البيانات اىل �أن حجم امل�شاريع امل�ستقبلية يت�صف قطاع العقار املكتبي ب�شدة ح�سا�سيته جتاه الأداء • “Proposed Supply” قد �إنخف�ض بن�سبة 68% خالل الفرتة الإقت�صادي, فقد �أدى الركود الإقت�صادي خالل العام )�سبتمرب 2008 – يونيو 2009( حيث مت �إلغاء �أو ت�أجيل احلايل اىل توقف اخلطط التو�سعية ملعظم ال�شركات العديد من امل�شاريع خالل الفرتة املذكورة. وبالتايل اىل تدهور الطلب على العقار املكتبي. كذلك لوحظ �أن العديد من ال�شركات قد حجزت م�ساحات مكتبية كبرية قبيل بدء الأزمة الإقت�صادية, مما يجعلها غري مهتمة ًحاليا بحجز املزيد من هذه امل�ساحات اىل حني حت�سن الظروف الإقت�صادية.

ن�سبة التغري �سبتمرب 08 يونيو 09 (�سبتمرب 08 – يونيو 09) العقارات امل�ستخدمة - �أ 500,000 507,295 1.5% املعرو�ض احلايل - ب 454,053 396,323 -12.7% امل�شاريع امل�ستقبلية - ج 158,260 50,409 -68.1% �إجمايل العر�ض - ) �أ + ب + ج( 1,112,313 954,027 -14.2%

44 قطاع العقار التجاري و املكتبي البحرين املكتبي والتجاري

السوق العقاري املكتبي والتجاري في البحرين الربع 2 2009

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