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DAje vu...

This refers to 'New hope for Marina West homeowners' (GDN, August 16).

It was dAje vu when I read the latest article, seemingly a repeat of the CEO's comments made to the GDN last year.

It's still the same illusory vision of hope coming from the majority shareholders in Icons and Marina West. It must be difficult negotiating terms with potential financiers when you are the majority shareholder; shareholders by nature are motivated predominantly by potential profits and are often prone to exaggeration.

It's pure fantasy that any commercial bank today will fully fund the completion of partially-built towers with many unsold apartments. Financial institutions today will not fund a partially-built hotel, retail outlet sites, or unexcavated Marina all lying waste on a derelict site, purely on the basis of some shareholders' interpretation of future profits.

Proof of this is demonstrated by the inability to accept any offers from potential financiers over several years prior to the advent of a National Dialogue.

There are certain nuances that have been added to the November 2, 2010 article, plus the outright dismissal of buyers' allegations; but some quoted numbers are wide off the mark.

According to the past quotes, all recorded in the original number of apartments was 1,280 but reduced to 1,168 when Tower No 1 was re-designated as a hotel, so the total of 1,000 apartments printed in the current article is understated.

Furthermore, AMEinfo, dated 18-10-2009, stated 60 per cent of the entire project had been sold and I make that 700 apartments sold, all at odds with the 52pc and 612 units sold figures detailed in the letter sent out to all buyers via e-mail on August 14.

As for the reference to 63pc of the entire project area remaining unsold, I suggest reading all the 2010 and 2011 reports by Cluttons, Knight Frank and DTZ regarding the current surplus with massive over supply of commercial and residential units in Bahrain, all in unison declaring that nowadays no one wants to buy an unfinished real estate unit.

I like the carefully chosen phrase 'BD50 million worth of build on site'; has their quantity surveyor allowed for the cost of rectifying all 'dry shrinkage' to each 11 towers that lack glazed windows thus leaving masonry open to all the elements during the last four summers?

The contents of the letter indicate the build to-date of the Marina West project has been funded solely by all payments from Marina West off-plan buyers!

The admission of receiving BD49m of buyers' money is of great interest especially with regard to cash flow in June 2009 when the GDN reported Al Hamad workforce striking because the main contractor's workers had not been paid for three months.

From an extrapolation of the above figure, during 2009 Marina West would have been receiving over BD6m each quarter from their off-plan apartment buyers.

If the contractor's workforce were being paid BD80 per month, when adding BD10 for the LMRA levy, then a 300-strong workforce would cost BD27,000 per month, or BD81,000 per quarter ignoring their additional cost of workers' transport, food and accommodation.

Even allowing for paying bank interest on a BD16m land mortgage of BD250,000 per quarter, plus buying building materials, was this project put in total jeopardy for the sake of releasing BD81,000 in June 2009? My regular visits to their site witnessed a rapid downturn with the contractor's workforce after June 2009, until final cessation in March 2010.

I began buying a 'freehold' off-plan apartment in Marina West during April 2007 but wonder if any of these apartments can be freehold if the land is mortgaged to a bank with title deeds apparently held by yet another real estate outfit or their foster company?

Using one of the Marina West chairman's figures quoted to a CEO of a major Bahrain company in January 2011, there appears to be a way of completing this project in stages for under BD20m and in doing so ultimately provide over 370 low-cost apartments for under BD57,000 via long-term lease purchase agreements solely for Bahrain nationals.

However, this would necessitate full government intervention followed by their absolute control of this long-stalled project. If this could happen then there is truly hope at last for Marina West homebuyers, and it would put an end at last to this ever recurring dAje vu.

Alan Pitt

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Publication:Gulf Daily News (Manama, Bahrain)
Date:Aug 21, 2011
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