New hope for Bahrain's Marina West buyers
Manama, November 2, 2010
Developers of a stalled residential project in Bahrain said they hoped to break a financing deadlock by the end of the year.
It follows an SOS by a group of property buyers still waiting for their new homes at the multi-million-dinar Marina West project.
The homeowners are planning to ask the Bahrain government to intervene in the development, where work allegedly came to a standstill in March.
However, chief executive officer Mahmood Janahi yesterday revealed a deal was on the horizon that would inject money into the project.
'We are making all efforts to find acceptable solutions to minimise the effects of the current impasse,' he said in a statement to our sister newspaper Gulf Daily New (GDN).
'Valuation report of the project remains excellent and we are in advanced stages of discussion and are finalising with potential international financial institutes and strategic investors, who we believe would add value for the project to exercise various investment options.
'The international financial institutes are showing in-depth diligence and we are co-operating with their compliance departments.
'Especially in the current market condition, raising funding for real estate projects is extremely difficult and time consuming.
'We expect to announce the successful completion of the financial dealings by the end of this year.
'Each buyer will be informed of the progress and it will be also announced in the local and international media. We will also inform the revised milestones, phased delivery and programme of completion.'
He blamed the global financial crisis for causing a 'real estate meltdown' in Bahrain and across the Middle East.
'This is evident, as many other real estate projects have been stalled here and in the Middle East region,' he said.
'Global recession has a direct impact on real estate meltdown, as debt obligations are not enticing the investors anymore in this region after Dubai debacle.
'On the other hand, mortgage finance lenders who had bought the loans from the mortgage originators, repackaged them as mortgage-backed securities, and tried to sell them to the global investors, with no takers.'
His comments came in response to a group of home buyers, who plan to petition the government over delays at the $750 million (BD283.5 million) development.
In a draft petition, which is yet to be presented to the government, the group appeals for help in resolving what it describes as an 'investment failure'.
'This letter is an appeal for your help in resolving a $750 million investment failure at the Marina West project that is hurting hundreds of families and their confidence in local business practices,' reads the petition.
'Our hope is that the Bahraini government can intervene urgently to help persuade the project developers to accept one of several proposals made to resolve their financial and management troubles.
'We are a group of over 400 Bahraini, Saudi, European, North American and other families who have invested about $150 million (BD54 million) since 2007 in the Marina West project.
'Work on site has stopped since March this year and we were supposed to have received our apartments by December.
'We estimate that banks, suppliers and contractors are owed about another $125 million (BD45 million).'
They claim Marina West has broken a sales agreement by late notification of delays in the original completion date.
'For the sake of Bahrain's reputation as a safe and friendly investment centre in the Gulf, we sincerely hope the government will intervene to ensure completion of this project', adds the petition.
A series of meetings has now been lined up next week where buyers can sign the petition.
During the meetings, signatories will be asked to hand over BD10 each to cover legal and logistical costs.
The first meeting will be held on Monday at the Dhahran International Hotel, in Saudi Arabia, at 5pm.
It will be followed by another meeting at Mansoori Mansions, in Adliya, on November 9, from 6pm, and a final meeting in Bahrain on November 11 at the same venue, also at 6pm.
An official letter sent to Marina West buyers on October 7 warns buyers of delays in handing over homes due to ongoing talks over financing.
'Regretfully, this brought about delays in resuming the project and will therefore result in further delays in delivering your properties and completing the works', it said.
'In this difficult time in the economy, it is safe to say that finance facilities are not as readily available and are problematic.
'The procedure has been further complicated by protracted discussions.'
The Marina West project, located on Bahrain's west coast, consists of more than 1,000 residential flats and a five-star hotel across 11 towers.
It was originally scheduled to be completed earlier this year, but Janahi told the GDN in May that there would be a revised, phased finish date for late next year.-TradeArabia News Service