On the pandemic’s impact on office real estate in Bahrain
How do you assess the outlook for Bahrain’s office segment, and what strategies can building owners adopt to mitigate the risks related to the pandemic?
ALEX CRAINE: Although it may seem like the outlook for the office segment is negative given the risks arising from the pandemic and uncertainty regarding the new normal, there are reasons for optimism. For example, our firm rented more new space in Harbour Towers in 2020 than in 2019, and we are on track to continue this trend in 2021. We are seeing surprisingly robust demand and there are three companies interested in establishing a relatively large first-time office presence in the country. While it is not expected that conferences and other events will return to pre-pandemic levels in 2021, other popular events – such as a large art exhibition – will be held.
It is important for landlords to use targeted strategies to mitigate the risks associated with the pandemic. This could include procuring personal protective equipment, implementing strict safety protocols and improving air conditioning systems to safeguard the health of clients. Our firm gave tenants a three-month rent waiver in 2020 in recognition of the challenges posed by the pandemic. While this impacted the company’s finances, the prospects are bright.
To what extent will work spaces permanently transform as a result of the pandemic, and how can office providers adapt their growth strategies?
CRAINE: People must work collaboratively to develop and grow, and companies are realising that they cannot operate 100% online if they want a fulfilled workforce. The initial interest in remote work is shifting to the desire to have a hybrid model or a full return to the office, allowing employees to benefit from social interactions. This also separates work and private life, which is particularly important for workers with families. The offices of the future will be different: the days of overcrowded offices are done, and new layouts will likely focus on collaboration and generous space. This is going to be a part of our strategy moving forwards.
In addition to offering work spaces adapted to the new reality, we want to provide an attractive lifestyle by turning our properties into lively places that are bustling at lunchtime and in the evenings after work. Tenants also want support throughout the lifecycle of a business, from obtaining commercial registration to helping expatriate staff settle into their new homes, organising corporate events and adapting office space as the business matures. We believe this is the future of facility management companies.
What are the key elements differentiating Bahrain from its GCC neighbours in terms of attracting foreign companies and expatriate workers?
CRAINE: Bahrain is an appealing destination for foreign companies and workers for a number of reasons: the affordability of telecommunications services relative to other GCC markets; the robustness of transport infrastructure, now further strengthened with the opening of the new airport terminal; and the government’s openness and sound regulatory framework. Bahrain is also home to a highly skilled, hardworking and multi-lingual local workforce. Moreover, Bahrain offers a pleasant living experience for families, with quality education for children through various international curricula.
It is possible that Saudi Arabia’s decision to make it mandatory for companies working for government entities to be headquartered in the kingdom will have a positive effect on Bahrain. It may lead to an increase in demand for offices and homes in Bahrain, as it is easily accessible to Saudi Arabia. The lower living costs, the country’s welcoming community, and the availability of quality education and leisure offerings would help expatriates and their families live more comfortably. They could work from secondary offices or remotely, occasionally travelling to the company’s headquarters in Saudi Arabia.