A STALLED property development in Bahrain has been sold off to a leading hotel group in a first-of-its-kind public auction.
The Ramee Group of Hotels successfully bid BD3.6 million for the partly-completed Juffair Views residential tower, work on which commenced in 2007.
It now plans to pump another BD3.4m into finishing the 26-storey project, chairman and managing worker Raj Shetty told the GDN.
There were four registered bidders for the development, but Ramee Group of Hotels was one of only two that took part yesterday.
It initially entered a bid of BD3.5m, but increased it by BD100,000 to seal the purchase in an auction executed by Savills Northern Gulf at the Justice, Islamic Affairs and Endowments Ministry.
The auction was organised as part of government efforts to complete work on delayed developments, which have left hundreds of investors out of pocket.
Juffair Views was supposed to be completed in 2009, but work stalled and the original developers blamed the financial crisis, issues with materials being sourced from China and manpower problems.
It was one of four projects referred to a judicial panel known as the Committee for Stalled Real Estate Projects, along with Marina West, Amwaj Gateway and Sunset Hills.
A member of the panel, Judge Amal Ahmed Abul, told the GDN efforts to resolve the remaining developments were ongoing.
“We have to look forward to settling the other projects as well,” she said.
“There are many efforts to find developers and we also keep the option of auctions open.
“We are glad that the pioneering auction of a project in Bahrain went smoothly and faster than we expected.”
The BD3.5m raised through the sale of Juffair Views will be split between those who invested in the original scheme, including apartment buyers who have waited years for their property to materialise.
“The amount will be deposited in the ministry’s treasury and, after legal procedures, will be distributed to the investors and creditors who also bought units within the project – which is the normal procedure in every such deal,” said Judge Abul.
“They will not get the full amount, only a percentage of the sale, and they can claim back the rest of the amount directly from the courts.”
Meanwhile, Mr Shetty revealed plans to market the Juffair Views property – featuring 40 one-bedroom and 40 two-bedroom flats, a penthouse, a health club and other amenities – as serviced apartments once it is finished.
“We hope to complete the project within one year and hope it will make a profit, being a good location with sea views,” he said.
“The project is almost 70 per cent complete and we had a detailed analysis of the building, as well as the figures.
“At the moment we plan to run it as serviced apartments and would invest BD7m, including the initial cost.
“The apartments will be modified with amenities suiting local requirements.
“The property is close to the US Navy base and we have a good presence in Juffair, with our three four-star hotels and several apartments, so we know the market well – which is our strength.
“The name will be changed, which we are yet to decide, and will be branded under the Ramee Group.”
Ramee Group paid 10pc of the cost yesterday, plus 2pc to the ministry for administration charges.
Legal procedures mean it must wait 10 days from today before officially acquiring it, which is to allow for further offers or objections, and will then have another 30 days to pay the full amount.
Savills Bahrain director James Moore revealed 28 parties expressed an interest in bidding, but only four registered and two showed up.
“There were three bids made by two bidders – starting at BD3.5m, rising to BD3.55m and finally the deal was struck at BD3.6m,” he said.
He described the auction as a positive indication of investor confidence in the Bahrain economy.
“This is a hugely positive move, which shows investors believe in Bahrain and they trust in the economy – and that’s the best news that we can have for Bahrain,” he said.
raji@gdn.com.bh
&uuid=(email))