But he warned that the popularity of Seef District
may lead to the same problems experienced in other areas. “The demand for office space in this area has caused much of the apartment supply to convert to office use. If this process is allowed to continue, Seef District will become a one-dimensional office district with the consequent problems of traffic congestion and inadequate parking. “This is precisely what has happened in the Diplomatic
Area, where apartments were converted to office use and the area is no longer able to function properly.”
RESIDENTIAL MARKET
CBRE’s report stated that since Q4 2008, residential lease rates for quality apartments in prime areas such as Seef District and Juffair dropped by approximately 10 percent. Transaction activity has come to a virtual standstill,
although occasional sales have been made at ‘spotty’ prices, i.e. driven by the original purchase price paid by the vendor. Investor/speculator activity has also dried up. Few residential projects have been formally cancelled, although many have been put ‘on hold’ or delayed until new construction contracts have been negotiated. Williams highlighted the lack of low-cost housing.
“The demographics of the typical Bahraini family and the huge influx of low paid foreign construction work- ers are both placing a severe strain on the housing sector and there is a well documented need for low- income housing.” Yet he stated that the issue is not easily fixable.
“It is difficult for the private sector to make this pay because there has been so much land-price specula- tion in recent years and developable plots for this use are hard to assemble at workable prices. The issue is also fairly sensitive in political terms and although the government has taken great strides to address the problem, it remains unresolved at the moment.”
OUTLOOK
The report stated that the general economic circum- stances in Bahrain ‘remain extremely positive’, but the ‘plethora of inappropriately positioned products in the development pipeline mean that Bahrain faces some significant challenges in the next year or two.’ Williams believes that the remedy for many of the
kingdom’s problems lies in planning enforcement. “Bahrain could resolve many of its problems through
Office Lease Rate Changes
Q4 2006 to Q4 2009
15
Prime
Secondary Tertiary
12 12 1000 800 9 9 600 6 6 400 3 3 200 0
Q4 2006 Q4 2007 Q4 2008 Q4 2009
0 0 400 200
Q4 2006 Q4 2007 Q4 2008 Q4 2009
Prime: Diplomatic Area, Seef District, Bahrain Financial Harbour, Secondary: Government Avenue, Sanabis, Hoora Tertiary: Manama, other peripheral areas
planning enforcement alone; traffic and parking issues could be ameliorated at a stroke and the government would not need to spend anything to achieve it.” He added: “If owners of buildings constructed as
apartments were obliged to use them as such, we could quickly move away from this one one-dimensional, mono-use development culture that persists in Bahrain. In the Diplomatic Area, a large number of completely unsuitable buildings currently used as offices would be converted back to apartment use, traffic patterns would change, parking requirements would be lessened and the area’s problems reduced at a stroke. “With Seef and Sanabis districts heading down exa ctly
the same path, the same approach could be taken and parking and traffic problems instantly improved. The apartment buildings used as offices do not come close to meeting commercial parking requirements.”
Williams added that the most pressing infrastruc-
ture need is for roads: “With a huge volume of drivers trying to get into a handful of key commercial areas at peak times, the roads are becoming unworkable. Having arrived at their destination, drivers are then forced to circle around for extended periods looking for parking spaces, the traffic stays on the roads and the situation is exacerbated. “The planners need to work towards reducing
development densities in commercial areas, while office developments need to be in business park environments away from central locations. In addi- tion the government needs to build formal parking structures in central areas rather than relying on the private sector to provide sufficient parking for its employees when there are extremely limited public transport options.”
apr-may 2010
/
/ 35
0 600 15 1200
Seef Juffair
1000 800
Quality 3 Bedroom Apt Lease Rate Changes
Q4 2006 to Q4 2009
1200
BD/sqm/pm
BD/unit/pm
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