10 September 2007

Now BNP Paribas moves in...

BNP moves into BFH

MANAMA: Global banking giant BNP Paribas yesterday announced it is to re-locate its regional headquarters to Bahrain Financial Harbour (BFH).

In a deal Bahrain Financial Harbour Holding Company (BFHHC) chief executive Stephen Rothel described as "one of the largest private sector lettings in Bahrain for some time", the bank will occupy five floors in the west tower of the development on a 10-year lease - covering more than 5,000 square metres of office space.

Yep, they have another tenant! I've been watching the occupancy rate of the Bahrain Financial Harbor over the past few months, which I have to say I still think is pretty slow.

I've had high hopes for the two gleaming emerald towers, but since their actual Phase I opening back on the 2nd of May (a little over 4 months ago), the place doesn't seem to be that lively just yet. As far as I know, Servcorp (a provider of virtual office services) and Reuters have started operations there. Besides those, Dexia Asset Management, Bank Alfalah and Gulf International Investment Company are planning to move there but haven't yet (If anyone knows of any that have already moved there, please let me know. For some reason, information about this project seems to difficult to get).

Anyhow; so far two companies settled in, and another four planning to move there. Obviously there is also Gulf Finance House, the company that facilitated this project, who are going to take a few floors.

For a project of this size, every month that goes by without tenancy must result in a considerable loss. A little over four months after the opening, there is still quite a distance to go; which just makes me wonder - was this project in the right place at the right time?

I guess something went wrong with this project; was it too much focus on getting the buildings done and ready, with little effort placed on approaching prospective tenants? Was it the expectation that clients would jump at the opportunity to rent office space at the BFH? Or maybe the demand for this type of facility still isn't required in Bahrain yet? Too much too quick?

Which brings up another question; what about the other buildings springing up all over the place; the World Trade Center, the unbelievable number of office buildings being constructed right now in Seef, Juffair, and so on? Is there demand? Or will they end up as deserted buildings?

This isn't a professional opinion, so don't get me wrong, but this is what it looks like to someone staring at the towers, basking under the sun in all their glory. Does it promote a confident image? I don't doubt that tenancy will be at 100%, or close to it at least a year or two from now. But does it really make sense that a project of this size, one that is supposed to be the pinnacle of a financial center's excellence and innovation, takes this long to bring in tenants? If this takes as much time as it did to fill up, how about the others? And again, why is information about the tenants etc, so difficult to come by?

Just seems a little confidence shaking to me.


Anonymous said...

Think GOSI...

iMaha said...

hmmmmm!!! Interesting! I've never thought about this subject from this angle! I think that I'll start digging for a bit of info..
Great post! well done dear.

Vampire D said...

I think one of the turn off so far is the access point, there is no easy way reaching it so till they fix the back roads coming from the Pearl Roundabout things will be slow.
BTW is parking space available for stuff and visitors?

Ammaro said...

Merlin; what about Gosi, exactly? There's a million things in my head about them

Diva; It's the first signalling of a problem, that we've managed to dig ourselves into. It's a small issue for now, but the outlook doesn't look too good; a rolling ball that's going to get bigger and bigger.

Shahrayar; That could be part of it. Also, what incentive is there really for a company to shift its office space? The move cost BNP a few million, but I guess they needed it since they were squeezed in their current diplomatic area offices, but how about other companies? Are most willing to shift?

Eyad said...

Ammar, I know for a fact that Al-Rajhi are moving in pretty soon, and they also own one of the smaller buildings in BFH.

from where I see it, its the building management, they aren't doing so well, and another thing is, getting in and out of the BFH is not the easiest thing in the world, the rates these office spaces are going for is not the best around, specially for a building that is not offering you anything Extra.

the twin towers (WTC) on the other hand Have some guaranteed tenants from the old Sheraton tower, but I see a big problem with them, Due to the design of the building, there are hundreds of poles inside every office, it will need a very sharp interior designer to utilize most of the space in the best way.

I personally think Manama is done, we need to move on to new area's to distribute the traffic and make life a bit more easy.

Yacoub Al-Slaise said...

I think the infrastructure around the BFH is the biggest turn off to local companies

I have a gut feeling that it will gain momentum soon enough inshalla, I just think that other companies are watching how the first companies are moving in and settling before planning any move.

Yacoub Al-Slaise said...

Eyad, do you think that the BFH will be filled with mobile phone shops like GOSI?

Anonymous said...

You can add Meena Telecom,Bahrain Stock Exchange, and some Jawad franchises to the list, there are more but can't remember them now. Also the BIIC is already sold to Alrajhi and Alrashid bought somthing I can't remember what now.By the way what buildings are you talking about? companies are busting their but looking for good buildings to buy or rent in Seef and guess what? there are none. MTC or ZAIN just bought the Al Kaid 25 story building in Seef for BD 18 Mil and Addix Bank the Al Rushood building for more than 10 Mil, UIB couldn't find a suitable building so it bought an over priced 7 story in Seef and a plot to build a suitable headquarters in the future. Ah also KFH and Muskat Bank have booked several floors in each of the BTC towers which will be fully booked soon.

Anonymous said...

Also Fedex, and the visa section of the British Embasy

Anonymous said...

Azadia too


Anonymous said...

Al Shaya will open some outlets too