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First housing PPP in the Middle East reaches financial close

First housing PPP in the Middle East reaches financial close

Trowers & Hamlins is pleased to announce that the first housing public-private partnership (PPP) in the Middle East reached financial close in late September, marking a significant milestone in bringing over 2,800 units of much-needed social and affordable housing to Bahrain.

Trowers & Hamlins has acted as lead legal counsel on the deal since its client, the consortium led by Naseej B.S.C (c), was appointed preferred bidder in late 2010.  The Naseej-led consortium has since established a wholly-owned project company, Sharaka for Housing Projects Company BSC(c), to deliver the project. 

Last month's completion of the financing arrangements on the US$450 million (approximately GBP£278 million) PPP paves the way for the procurement and construction of the 2,800 units spanning one site at Al Luwzi and two sites at Al Madina Al Shamaliya (also known as North Bahrain New Town) to move ahead.  The first phase of units is expected to be delivered during summer 2016.  

This is the first public-private sector partnership of its kind in the Middle East region and is the biggest single project ever awarded by the Government of Bahrain's Ministry of Housing.  The project forms a key part of the Government of Bahrain's plans to deliver 50,000 housing units to tackle an ever-increasing shortage in housing.  

Abdul-Haq Mohammed, partner and head of International Real Estate at Trowers & Hamlins, commented:  "Governments in the MENA region are acutely aware of the need to find creative ways to meet housing demand for their growing populations.  We are seeing more and more projects being launched to deliver affordable housing, as opposed to the previous market for high-end housing.  This project is probably the most significant of all and sets an important precedent for the region."

Peter Greatrex, senior associate at Trowers & Hamlins, added:  "As this represents a pathfinder project for Bahrain and the wider MENA region, our client and the Ministry of Housing have needed to deal with a number of challenges over the last three and a half years.  Reaching financial close represents a significant achievement for all parties involved."

Abdul-Haq Mohammed and Peter Greatrex were supported by lawyers based in Trowers & Hamlins' Bahrain, Dubai and London offices, including partners Michael O'Reilly and Bill Jefferies, managing associate Rachel Clayson, senior associate Mairéad Finlay and associates Peter Hawkes, Tom Reynolds and Katie Davies.  Specialist housing expertise was provided from London by partners Tonia Secker and Ian Graham.