Workers take a break in front of an art gallery at Block 338 in Adliya.
Workers take a break in front of an art gallery at Block 338 in Adliya.

F1 drives life back into Bahrain's 'love street'



Once a bustling district filled with young Bahrainis and expats alike, Adliya had lost its allure. But thanks to the economic boom that comes with hosting a race, the district is again filling up with shops - and more importantly - shoppers. Mazen Mahdi reports from Manama Block 338 in Adliya, on the outskirts of Manama, had once been the centre of the capital's nightlife and a thriving cultural district, but over the past decade it has been overshadowed by shining new skyscrapers and malls that sprang up around it. Bahrainis used to call the strip "love street" because of the groups of youths who cruised its main road on weekend nights, while US sailors stationed at the nearby 5th Fleet headquarters nicknamed it "shawarma alley" because of the many restaurants that lined both sides of the narrow road. The nicknames survived, but the youth, expatriates and tourists who used to fill Adliya's streets left for neighbouring Juffair and Seef districts, where new malls, restaurants and movie theatres cover the reclaimed land. Today, however, Formula One racing, which helped drive the economic growth in Juffair and Seef by development there, is also fuelling the urban regeneration of Adliya by breathing life once more into its restaurants, cafes, shops and art galleries. The expected influx of tens of thousands of tourists during the three days of the race each year since 2004 has prompted officials here to develop the infrastructure of the area, to help businesses capitalise on the spike in visitors, especially since many of the hotels that the tourists stay in during the race are within walking or driving distance from Adliya. "The Block 338 project adds an important aspect to improving one of the most entertaining and best places to spend time when visiting the island," said Sheikh Hamed bin Mohammed Al Khalifa, the municipalities and agriculture ministry assistant under-secretary for urban planning. The tourists - as well as Bahrainis and expatriates - who it is hoped will visit the area year round, are also likely to inject money into Adliya's businesses, which range from expensive outlets such as art galleries and antique shops to low-end services such as taxi drivers and grocery stores Titus Fernandez, the managing director of Zoe Cafe and Restaurant, said his business, which is located in the heart of Block 338, and has been around for more than 10 years, has experienced better business since the development began in 2009. "The better parking facilities and the overall beautification has made the area stand out more and helped attract more customers. The economic crisis has had an impact and this year we still haven't seen many new customers coming ahead of the F1, which usually happens a week ahead of the event, but it's still early," he said. "Over the year, however, our business has been growing steadily and the development witnessed over the past two years has helped that growth a great deal." Sheikh Hamed said the area's authenticity is what makes it stand out and attract such investments. "The whole area is very authentic, which makes it impossible to replicate anywhere. It is not a Disneyland approach where everything is built from scratch, but the beauty of it is how it has come together and developed into a unique gourmet dining district," said Sheikh Hamed, who is overseeing the district's redevelopment. "This is the only area in the Arabian Gulf where there are high-end dinning and lounge locations outside of hotels," he said. The area aims to be a bit like M Street in the Georgetown section of Washington. Sheikh Hamed, who grew up in Adliya, added that the ongoing development would have an impact on the country's economy as a whole by directly helping established and new businesses. "The first phase of Block 338 urban regeneration and redevelopment began last year. The second phase will be ready before this coming Formula One" set for this weekend, said Sheikh Hamed. He said that the impact of the second phase would be far greater than the first phase, especially since the new developments have created more parking spaces, eased traffic by opening new roads, and created a new pedestrian road and square. When Bahrain hosted the first F1 race in the Middle East in April 2004, officials here were hoping to tap into an existing fan base in Europe and Australia as well as among expatriates living in the Gulf to stimulate tourism and new investments. "The direct and indirect economic impact of hosting the F1 race for one week has been around US$600 million [Dh2.2 billion]; the figures are big and significant. If you think about it, the investment in the circuit [estimated to have been around $180m] has been repaid in one year many times over," the outgoing managing director of the Bahrain International Circuit, Martin Whitaker, said in January. BIC officials also appear to be eyeing the new crop of Emirati fans that have been drawn to the sport after Abu Dhabi hosted its first F1 race last year, with the famous Emirati singer Hussain al Jasmi kick-starting this weekend's concert events that will include Arabic and western performers on the sidelines of the race, the first of the season. mmazen@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Real estate tokenisation project

Dubai launched the pilot phase of its real estate tokenisation project last month.

The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.

Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.

Awar Qalb

Director: Jamal Salem

Starring: Abdulla Zaid, Joma Ali, Neven Madi and Khadija Sleiman

Two stars