Bahrain and Saudi Arabia may be moving,
if gradually, towards allowing 100 per cent foreign ownership of land
for development purposes, according to real estate sources there.
Bahrain, for one, "has eased most of the requirements in the last
Non-GCC nationals or companies are being brought into the fold, and
allowed to take up land possession, maybe in specially designated
areas," said Hussein Alsaffaf, managing director of Manama-based
property developer Saffaf Homes.
"I believe talks in this regard are going on at the highest
levels, and it will provide a definite boost to the property
market." While banks operating in Bahrain can own the land on
which their head office is located, sources suggest the "net
could be cast wider, allowing companies in other sectors to do the
As for Saudi Arabia, "the new investment law passed in April
commits to 100 per cent foreign ownership, but whether this extends to
real estate as well is not known. "But there are definite
indicators to liberalize the sector, which is quite the right move to
make in these times and help draw in long-term capital
commitment," said Donald Bradley, partner for Bahrain and Saudi
Arabia at Cluttons, the UK property firm.
"Property in the Gulf is still relatively inexpensive compared to
other world markets, with no taxes on occupancy and rental rates
geared more towards the cost of construction than on actual land
value. And there are extensive areas which could be made available.
"Obviously, with foreign ownership allowed, property value will
appreciate, which is why any opening up should proceed
While rising oil prices have been a help, major property developments
on the commercial side are taking place in Saudi Arabia — the
Faisaliah Center, which opened early this year, and the Kingdom Center,
opening late this year, being the more prominent among them.
Where the government is finding it difficult to provide the funds,
private developers are increasingly active in taking on infrastructure
projects in the developing areas and then selling serviced plots.
"All the main cities in the kingdom are expanding, and we see a
definite demand for higher standard retail and office space,"
Alsaffaf said: "Bahrain is still very competitive as an operating
base compared to Dubai, with costs approximately 40 per cent lower. We
are seeing a revival of interest by international companies, and the
recent decision by Orbit to have its regional operations here is
testimony to that. These will in turn fuel demand for bigger
Up market properties, the 25-storey National Bank of Bahrain Tower for
instance, are currently going for 7-10 Bahraini Dinars (about
Dh70-Dh100) a square meter in Manama's commercial district, according
to Bradley. Comparable rates in and around the Diplomatic Area and
Seef are about 6-8 Dinars. ©Saudia-Online.com
Source: Gulf News