Is real estate a good investment in Bahrain?
Charlie Cooksey interviews Royal Ambassador CEO, Eng. Mohamed Al Kooheji.
Fontana infinity is one of the latest and most beautiful developments in the Kingdom of Bahrain. Just recently, Gulf Insider sat down with Eng. Mohamed Al Kooheji, CEO of Royal Ambassador to discuss real estate in Bahrain as well as the newly launched Tower B of Fontana Infinity.
The economy is still recovering from the effects of COVID-19. Why launch the FI Tower B now?
Looking into the investment landscape in Bahrain and different asset classes today – whether bonds, gold, equity, cash, or real estate – I would say that considering real estate is one of the best investments as real estate in Bahrain is undervalued and there’s huge potential for growth.
Looking into bonds, we used to see high numbers in 2017-2018, with bonds with a return of up to 6%. But today, the opportunities are no longer as they used to be, with returns of 2-3.5%.
When it comes to gold, we can see that gold has skyrocketed up to $2,000. When it comes to other asset classes like cash, today, it’s the worst as we can see inflation and today many investors are considering real estate as a good option to hedge against inflation.
We can see that money is losing its value and when it comes to construction and raw materials – it has escalated up to 30%. Gold has gone up from BD 200 per ton to BD 300. We can see the same with copper and lumber as well as with many others.
What does Tower B offer that is different from Tower A?
We have not increased our prices in Tower B. So, there’s a huge opportunity to buy in Tower B. There are many people who would like to buy and mitigate the risk of construction. They would like to buy a leased property as well with guaranteed returns to maximize their returns. So, tower B comes as a very good option for them.
We have also considered to provide them with a fully fitted-out and fully-furnished product that offers a different value proposition from Tower A.
Tower B also comes with different sea views looking into the Hidd and Muharraq Causeways, very unique entrance, and provides more privacy compared to Tower A. In addition to this, Tower B is a huge opportunity for the people who have missed the opportunity to invest during the construction stage of the Fontana Infinity or if they have seen that the market was not in a good state to invest back in 2016-2018. Now, they can see the product is completed, fully-furnished, and leased out with guaranteed returns. So, it becomes comes as a very excellent option for them to buy.
How is real estate a good investment when you compare and take into account other asset classes?
Real estate has always been one of the best asset classes to invest in, in terms of asset appreciation. It’s an income generating asset class.
Looking into the other options, whether it’s equities, bonds, or gold – today, they have skyrocketed. But when it comes to Bahrain, the real estate is still at the bottom. So, you have a big advantage entering when the market is as low as it is today and selling when it’s as high as it used to be.
So, there’s huge potential for appreciation as well as yields incomes that gives you handsome returns up to 8-10%. That’s what makes it totally different from other asset classes today.
Do you see good substantial appreciation in both short term and long term in Bahrain?
I will say in the long term. Let’s say you look at gold as an asset class today – it used to be $1,000, today it has skyrocketed to $2000. Today, entering into the gold market is not advisable if you have not done it earlier.
The advantage of buying real estate today is that you are buying at its lowest point and you are going to have a high gain. When it comes to yields, we’re talking about 8-10% yields per year – which is considered to be substantially high compared to any other market where you’re getting 1-3% max.
What percentage rental yield can owners expect from their investment?
I would say it varies from 6-9%, depending on the unit, its use, and its size. What makes Fontana Infinity different from any other property is that it offers a different lifestyle and experience with its amenities and services, ranging from its gym to its gaming area, and more. We have considered every possible category of tenant’s interest within the property. So, it stands out from any other asset class available within the market.
What makes the Fontana series a good option for residents or buyers?
It has been developed different from any other property. When it comes to space planning, to the public area, to the way the views are displayed within each area, we have considered the amenities within the public area. It is built by the Kooheji Contractors and there is high attention to details when it comes to the services, the finishes, and details.
We have considered every single aspect of quality when it comes to the project. All the finishes have been selected from Italy. We ensure that there are no compromises when it comes to quality. When it comes to the service, you have Royal Ambassador offering five-star services and amenities and you are enjoying a luxury lifestyle standard and a resort feel within a residential tower.
What’s your personal favorite part of this whole project?
The Co-working space. We came up with a different concept considering the COVID-19 situation. We have seen people looking into working from home. We provided a 250 sqm co-working space and we found that a lot of people find it very useful for them and it’s always highly occupied.
For more information on Fontana Infinity, call 1600 0061 or visit their website.
