Born out of the real estate boom Bahrain experienced in the mid-2000s, a Bahrain banker decided to put money and skill into developing facilities for SMEs to thrive. Shying away from the seemingly lucrative luxury residential property market coming up around him, he developed Majaal, which is now gearing for a major expansion

Located atop Almoayyed Tower in the Seef area, Amin Al Arrayed's office overlooks some of Bahrain's top real estate properties, some of which he helped develop himself.

The US-returned economist's first experiences in the real estate sector came when he was regional head of retail banking at Bank of Bahrain and Kuwait (BBK) from 2001.

"At the time, I was in charge of mortgage financing," said Mr Al Arrayed, who is general manager at real estate firm First Bahrain.

"I could see the economic boom happening in real estate and that it was underserved."

Drawn into Bahrain's lucrative market, he helped set up property firm Reef Real Estate Finance Company in 2006.

The former banker who worked with the Central Bank of Bahrain as well as the International Monetary Fund soon recognised that wooing the luxury segment could become unfeasible in the long-run.

"The luxury segment was badly impacted during the economic crisis," he said.

"We quickly realised that we shouldn't put more money into this portfolio."

Realising that industrial projects made more sense and would contribute better to the economy, he took charge of First Bahrain, a company set up by Kuwaiti investors.

With 60,000 square feet of land in the Bahrain Investment Wharf and 20,000 sq ft of commercial and residential area in Janabiya as their assets, the firm began to conceptualise an indigenous real estate model to help boost the economy.

"We realised when we were looking for office space that it would be a great idea to provide usable work spaces for small and medium enterprises (SMEs)," he said.

Upcoming businesses were cash sensitive, he figured and it would be a misallocation of their resources to acquire land or build warehouses.

Poor utilisation of funds also led to SMEs buying into villas and unsafe premises which caused fires and other accidents.

Majaal, First Bahrain's flagship project was soon developed to be an affordable alternative for SMEs requiring warehousing.

Providing 100 to 200 sqm of flexible units for businesses as well as other facilities such as Internet and security, Mr Al Arrayed's $ 45m project soon faced a dilemma, he had far too many takers.

"When we started to gain notoriety," he joked, "foreign companies started coming in."

The logistics made sense to the foreign investors as the Wharf was strategically connected to prominent ports and highways.

"The foreign direct investment (FDI) we brought in was very tangible," he said.

"Twenty per cent of the companies we have are high value FDI."

By the end of 2011, the year Bahrain saw unrest and a slowdown in the real estate sector with several projects coming to a standstill, Majaal had achieved full occupancy.

Unable to cope with the demand for custom-made facilities by local and foreign companies, Mr Al Arrayed's team explored the option of expanding.

Last week, the firm signed agreements to begin construction of Majaal's second development phase, which is set to provide 40 new units for SMEs.

"When we secured approval for the second phase, it was a huge validation for Majaal and the prospects of Bahrain going forward," he said.

"It is a strong indicator that people are willing to invest."

With warehousing proving a productive investment for the firm, First Bahrain has plans to develop defensive economies such as children's recreational centres and strip malls.

Mr Al Arrayed however, is cautious about the real estate sector and has steered his portfolio away from any speculative investments.

"As a developer, one of the biggest risks is that infrastructure isn't ready when the project is ready," he said.

"We've bought into Bahrain as an investment and logistics hub and we're feeding money into it."

The economist believes that the country's real estate sector has turned a corner.

"Once real estate takes in the characteristic of a stock market, then it will be susceptible to the same shocks as the stock market," he said.

The economy's ebb and flow will determine that better investors stay on in the country, he added.

"We're turning the corner," he said.

"We're starting to see confidence come back and companies invest again.

"There's a resilience that's building up now."