Bahrain and UAE sign $4bn real estate deal

Imago Images/Jochen Tack via Reuters Connect

• Eagle Hills to work with Edamah
• Focus on ‘sustainable projects’
• Bahrain remains relatively affordable

A UAE property investment and development company has signed a $4 billion deal to develop real estate across Bahrain.

Abu Dhabi’s Eagle Hills International has finalised a joint cooperation agreement to set up Binaa Al-Bahrain, with a focus on residential, commercial and entertainment projects across the kingdom.

The new company will work with Edamah, the real estate arm of Bahrain’s sovereign wealth fund Mumtalakat, according to a report by state-run Bahrain News Agency.

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Mohamed Alabbar, board of directors chairman of Eagle Hills, said the real estate investment will “strengthen Bahrain-UAE relations”.

The company will “build sustainable projects that would preserve Bahraini identity and promote economic growth”, the report said.

Eagle Hills International is behind the development of Marassi Al Bahrain, a luxury residential and commercial project located in the Diyar Al Muharraq island complex.

Bahrain’s government has undertaken various initiatives to foster foreign investment. This includes allowing foreigners to own property in designated areas and providing tax incentives aimed at stimulating demand within the real estate sector.

Residential real estate transaction volumes were up around five percent year on year in the fourth quarter of 2023, while transaction value rose by two percent, according to Stephen Flanagan, regional partner and head of valuation and advisory at Knight Frank Mena.

He said that there was “minimal” price growth in villa prices over the 12-month period, while apartment sales softened by two percent to BD665 ($1,765)/sq m.

“Despite this, previously stalled projects such as Bahrain Marina in Manama are now moving forward at pace, with high quality mixed use developments being created on the seafront which will appeal to local and international buyers,” he told AGBI.

Bahrain stands out as a relatively affordable option compared with other Gulf countries.

In Dubai, CBRE Middle East reported that average apartment prices reached AED14,790/sq m ($4,027) in November.

This is still relatively dwarfed by apartment prices in London, which were fetching an average of almost 13,750 Euros/sq m ($15,000), according to Statista.

Bahrain has the highest fiscal break-even oil price in the GCC, forecast at $96/barrel of crude oil in 2024. Fitch Ratings has forecast budget deficits for this year at 2.9 percent of GDP.