Interview: Aaref Hejres
What is BaPDA doing to ensure the long-term sustainable development of the real estate sector?
AAREF HEJRES: BaPDA was created to serve as a body to represent developers and to oversee the interests of the industry as a whole, with the founding members being the largest 18 developers in the Kingdom.
There has historically been a significant gap between the public and private sectors in the industry. BaPDA acts as a representative body to close the gap by working with the government on laws and regulations that affect the sector. It will also provide a forum for developers to communicate their interests. This will help encourage development within the real estate sector by enhancing regulations, laws and consultation between the industry and the government.
What is BaPDA currently doing to educate Bahrainis in the field of real estate and land development?
HEJRES: We are currently in discussions with the University of Bahrain and other international universities to teach real estate development studies to undergraduates. There are currently no universities in the GCC that offer a real estate development degree. Creating and introducing this degree will not only help Bahrain’s burgeoning real estate industry but will benefit the sector as a whole throughout the Gulf.
We are also working with Tamkeen to offer courses in real estate development for Bahrainis. The first programme was very successful and had a large number of people enrolled in the professional course. There is currently a very long waiting list of applicants for the programme, which demonstrates the desire of the local population to get involved in the sector. We want to expand the programme to be able to accommodate other nationalities in the Gulf; not just Bahrainis.
We are also working very closely with Dubai Real Estate Regulatory Authority and Dubai Real Estate Institute to help increase local know-how and discuss cooperation between our organisations to further increase training and development programmes in the region.
What issues need to be addressed in order to make affordable housing public-private partnerships (PPPs) profitable for private sector developers?
HEJRES: Social housing is a growing issue and the government is keen to work with the private sector in order to meet this need. Traditionally, social housing was handled solely by the Ministry of Housing but the government is now working closely with the private sector due to the increase in demand. The issue is being addressed in two ways. The first is through PPP arrangements, which are new to Bahrain and to the region. The second is through indirect partnerships between the state and private developers. Both of these measures will allow the private sector to work with the government to produce affordable homes, which creates more options for Bahraini citizens. For private sector developers to be able to produce affordable housing, the government will need to offer subsidised services to the developer through land or infrastructure, for example. This is the best incentive the government can offer to private developers to contribute to solving the housing issue.
What sort of impact does the current state of land pricing in the Kingdom have on private developers?
HEJRES: Now is the best time for the private sector to enter the market. The pricing is reasonable, and in comparison to previous years, prices are much more affordable for private developers. There are several other encouraging factors for developers to enter the market. Financing is available and banks want to lend. Additionally, the demand for affordable housing is real and the market conditions are favourable. Land prices are forecast to increase in two to three years time, so now is the most opportune time to start developing.
There is a huge demand for housing as citizens do not currently have enough options to choose from. In order to meet this demand, there will need to be an increase in housing availability. More options will not only positively affect the spending habits of Bahrainis but will also have an impact on the sector as a whole.
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