Abu Dhabi: Mumtalakat, Bahrain’s sovereign wealth fund, is planning to invest heavily in the country’s real estate sector in the coming years, the company’s chief executive officer said in Abu Dhabi on Monday.
New hotels, shopping malls and spas would be constructed to boost tourism, Mahmood H Al Kooheji said, adding that the total investment in the projects would be about $500 million (Dh1.84 billion) over the next five years.
“There is a huge demand for real estate and tourism related projects in Bahrain due to large number of Saudis travelling to the country to spend time. The supply is not matching the demand and we hope to fill the gap with the new projects,” said Al Kooheji, speaking to reporters on the sidelines of Insead Global Business Leaders Conference.
The new projects that are being planned in the coming years include two hotels with a combined investment of more than $300 million.
The two hotels that are being built are Fairmont and another one in partnership with Dubai based Jumeirah Group.
There is also couple of other projects which the company is taking up in the kingdom with an investment of more than 100 million dinars (Dh974 million) each. Al Kooheji did not provide further details.
The new projects are being planned despite low oil price environment in the Gulf region that has impacted the revenue of the government.
But, Al Kooheji said the low oil price has not deterred them from making new investments. “We will continue to do investments. We never depended on government revenue for our activities and we rely on our own finances.”
On profits of the company this year, he said it would be better when compared to last year. “We are positive about profits this year. We expect to cross $100 million. Last year our impairment was mainly coming from aluminium company but the industry is improving. We are solidly behind it and are comfortable to be in that sector. It has created a lot of downstream industry and jobs in the country,” Al Kooheji said.
The company posted a profit of $76.3 million in 2015, against $243.6 million in the previous year, a drop of 68.7 per cent due to lower aluminium prices.
The company is also looking at new markets in Far East, the US and Europe for investments.
“We are comfortable to invest where there is corporate governance. We believe in long term investments,” Al Kooheji said.
Saudi Arabia is another country where the company is looking for opportunities. “We fully support the reforms programme in Saudi Arabia. It is the biggest market in the GCC and there are plenty of opportunities. We are ready to partner with any Saudi company for investments.”
The Saudi government launched an ambitious National Transformation Programme to create more jobs and boost foreign direct investment from the present figure of 30 billion riyals (Dh29.38 billion) to 70 billion riyals in the coming years.
Saudi Arabia and Bahrain are geographically close to each other and a number of Saudis travel to Bahrain on a daily basis through the King Fahd causeway that connects the two countries.