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REAL ESTATE REALITY.

This refers to 'High-end projects in pipeline at 2013 Gulf Property Show' (GDN, May 9). The 2013 Gulf Property Show has been widely acclaimed by all those who had the pleasure of visiting it. It showcased a wide range of high-end real estate projects already in the pipeline to be built in Bahrain.

For me, personally, the visit brought back a feeling of nostalgia. I recalled the fate of some major private real estate projects displayed at Bipex during 2007, 2008 and 2009; leaving me to reflect on how the mighty have fallen since those halcyon days.

During that bygone era, Marina West adopted the permanent mantle of platinum sponsors when marketing their off-plan project at Bipex, Estatex, Property Arabia, and Cityscape real estate exhibitions throughout the Gulf region. In December 2006 the public announcement of the Marina West project heralded the prospect of Bahrain's first coastal gated community - ideally located close to the Saudi Causeway.

A mere six-and-a-half years later, Marina West can be seen by all who pass over the Causeway as a crumbling monument to commemorate the folly of intransigent property developers.

Since January 2007, many prospective financiers have been rebuffed by these developers primarily due to overvaluing their partially built site to the detriment of investors who bought 612 off-plan apartments. Many of these investors are Bahrainis, who took out mortgages to buy their unfinished apartment through local banks, as recommended by Marina West.

Judging by the content of Marina West 2011 Investment Options Brochure, which these developers offered to prospective financiers, one item in particular leaps off the page - with the vastly inflated value the developers attribute to their unbuilt on-site hotel. No doubt, their 2013 version is just as misleading, but to what purpose and who are they trying to fool?

Prospective financiers know what each part of the Marina West project is really worth.

Also, for part syndication of this three-year stalled project, the developers demand 40 per cent of sale price payable upfront, and wrongly claim that any prospective financier could sell every one of the off-plan apartments at an inflated sale price during the two-year completion period.

The only way the 10 residential towers could be completed is by permitting a potential financier to appoint their own construction contractor - but with the provision that construction funds are payable from the financier direct to their contractor, and not diverted via a middleman.

As for the BD45 million the developers demand for their unbuilt on-site hotel; just leave the developers to arrange their own source of finance to complete it. Only then will they realise the hotel's real worth, bearing in mind its location in the Northern Governorate.

AP

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Publication:Gulf Daily News (Manama, Bahrain)
Date:May 16, 2013
Words:461
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