Four banks sign agreement with Diyar al-Muharraq
Bahraini real estate developer Diyar al-Muharraq has secured $366m in Islamic financing from four regional banks for a housing project.
The murabaha contract, which is a cost-plus-profit Islamic arrangement, was signed with the local Al-Salam Bank, Kuwait Finance House (KFH), Bank of Bahrain and Al-Baraka Islamic Bank of Bahrain.
The financing facility will be used to build the 1.2 million-square-metre Deerat al-Oyoun scheme.
In June, MEED reported that KFH had announced it will be financing the construction of 3,000 residential units at Deerat al-Oyoun.
Diyar al-Muharraq is one of the projects being developed under the Mazaya programme by the private sector.
Many schemes under the Housing Ministry have received GCC funding, but with such financing likely to decrease, the authority has been exploring alternative financing solutions as it remains committed to developing 40,000 housing units within 10 years.
Bahrain real estate market led by development and construction
Al-Madina al-Shamaliya project in Bahrain
Al-Madina al-Shamaliya project in Bahrain
As Bahrain continues to recover from the social and political unrest in 2011, the recent oil slump seems to have not affected its market in the same way as it has done in other regional countries such as Saudi Arabia.
Real estate and wider investment activity in the past five years has been slow, but according to local analysts and professionals working in the Bahraini market, it is understood the small island nation is now witnessing a positive development cycle, albeit one marked with caution, with investor interest predominantly from local and GCC markets.
As with other segments of the economy, it is the close proximity with Saudi Arabia that means Bahrain is able to position itself as a desirable location for businesses and regional operations looking to serve the Saudi market. Read more.
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