Bahrain shopping area to get major revamp
Manama, December 25, 2011
A shopping area next to the old GCC (Pearl) Roundabout in Bahrain will undergo a full revamp, and plans are afoot to turn it into a thriving shopping district, said a senior official.
The Manama Municipal Council is considering a major facelift or turning the location into an investment zone. It is now preparing a study that is expected to be completed by the end of 2013, which could mean work starting in 2014.
Businesses in the area have been hit hard by unrest since February, which has already forced the council to abandon plans to increase rents up to 13-fold in that neighbourhood.
Our sister publication, the Gulf Daily News (GDN) previously reported that eight companies at that location, which were threatened with eviction last year if they didn't agree to massive rent increases, had been given a temporary reprieve.
Huge losses caused by protests, particularly near what is now known as the Al Farooq Junction, prompted the council into a rethink - instead giving the businesses a two-year contract extension starting January 1 with a rent increase of just 10 per cent.
The GDN reported in April last year that the businesses had reached the end of their 15-year lease agreements, which were fixed at bargain basement prices.
They rent outlets from the Manama Municipality, but the council threatened to kick them out unless they agreed to rent increases that would bring them in line with current market rates.
However, the companies refused to back down and negotiations were taking place until February - when they collapsed due to unrest.
"This shopping district is not properly utilised and companies there have already made huge profits over the past 15 years from 'peanut' rates," said council vice-chairman Mohammed Mansoor.
"There are calls to have them evicted, but I don't agree that it should be done and have influenced the council to take a vote to have those companies continue under temporary deals.
"But that doesn't mean we will end up renewing the leases every two years indefinitely, because the market could improve in future.
"This is why we are preparing a study for a major revamp by the end of 2013 that could either see the place given to an investor or remodelled and beautified - whatever is more profitable."
The site of the now-demolished roundabout, which became the focal point of protests in February, has been cordoned off by security forces since demonstrators were evicted in mid-March.
"Whether the junction opens next year or after several years, we have to come up with a plan - several in fact - to ensure that we can utilise it in the best way possible," added Mansoor, who is also the council's financial, administrative and legislative committee chairman.
"Now we have companies leasing from us and although we are getting a low income from them, it is more risky to look for others and lose out - because we may find no one else."
Under the original rent rise plan, the council would have increased revenues from those eight properties alone from BD70,000 ($185,000) to BD480,000 a year.
Al Muntazah Market would have seen its rent rise from BD1,316 a month to BD10,980.
The owner of Super Laundry would have had to pay BD8,295 a month, rather than the current BD607, and BD1,050 instead of BD350 for his nearby Super Car Wash. Al Jasr Construction Company would have also been affected after being told that rent would have been increased to BD1,670 a month from the current BD350.
Brite Laundry would have had to pay BD9,040 rather than BD1,416 a month and the owner of another car wash was ordered to pay BD627 a month, up from BD187.
Meanwhile, a businessman was told his rent would have gone up from BD473 to BD5,145 a month and another faced an increase from BD300 to BD2,500 a month. – TradeArabia News Service