KUWAIT CITY, July 8: The Mangaf fire and subsequent stringent government oversight have shot up warehouse rental prices to exorbitant levels, severely impacting the industrial, food, and pharmaceutical sectors due to insufficient storage facilities. The economic and real estate experts have cautioned about the implications on consumers, production disruptions, and threats to food and pharmaceutical security. In the face of these challenges, the Al- Seyassah daily has praised the government initiative to establish a state-owned company for managing public storage spaces, but experts have warned against hasty reform laws, advocating for delayed implementation until alternative storage solutions are secured and industrial area rents are reduced.

Huda Al-Baqshi, Director General of the Kuwait Industries Union, emphasized the urgency to address “crisis traders” post-Mangaf. She acknowledged positive steps taken by the Council of Ministers but stressed the need for immediate solutions. Despite promises of millions of square meters for storage post-pandemic, tangible progress remains elusive. Al-Baqshi urged dual-track government action, combining short-term fixes with long-term infrastructure plans to resolve the crisis effectively. While the state efforts are commendable, strategic and cautious steps are essential to mitigate adverse consequences and ensure sustainable solutions for Kuwait’s storage challenges.

Amidst the shift to secure storage sites, rental values for storage and worker housing have surged. Reports indicate that warehouses previously leased at 200 dinars are now fetching 400 dinars, revealing how the crisis has been exploited by ‘crisis traders’. These investors lease unused residential spaces as warehouses, charging exorbitant rates, creating a new problem instead of solving the original one. Smart buildings are suggested to accommodate the storage surge in residential areas during this period. Some traders have converted vacant spaces in residential areas into storage facilities, renting them out at inflated prices. Thus, the state must take charge, ensuring suitable site allocation and distribution according to national priorities, under strict governmental supervision.

The demand for warehouses has become a governmental responsibility while the chemical industries have cautioned that they are ticking time bombs. Therefore, designated sites are necessary for chemical, biological, pharmaceutical, and food sectors, away from residential areas. The head of the Real Estate Union, Ibrahim Al-Awadi, agrees that Kuwait lacks major storage areas to meet local market needs. Existing storage facilities are inadequately equipped, lacking the necessary infrastructure to meet all storage requirements. Business owners have resorted to renting residential units in accessible areas due to proximity and ease of access. Al-Awadi believes the state should undertake projects to provide adequately equipped storage areas with clear safety regulations, separate from residential areas, meeting all market storage needs in the long term.

He likened this delayed government response to “better late than never”, suggesting that allocating million-square-meter spaces for storage by the Cabinet is a positive step, albeit overdue. However, establishing these facilities will require time, making it a long-term solution. Temporary solutions are also needed. During crises like COVID- 19, many operational companies provided temporary storage solutions quickly. These solutions, similar to wedding halls in Kuwait, offer spaces up to 4,000 square meters, equipped with fire suppression systems, suitable for safe storage away from residential areas. Warehouse migration is noted, with many property owners converting rented units into warehouses for tenants.

Al-Awadi emphasized that today’s local market situation signifies a warehouse exodus from the investment sector due to compliance and safety concerns, which is commendable and necessary for state enforcement. Price hikes have occurred, with significant rent increases of approximately 10% to 20% in permissible storage areas near investment properties such as Shuwaikh, Ardiya, and Rai. These areas have witnessed notable rental increases, causing financial strain on residents and tenants alike.

The economic expert, Suleiman Al-Dulaijan, highlighted Kuwait’s storage problem, attributing it to the lack of clear statistics and data on investment sector storage needs. He pointed out two types of storage: food storage, available in some simple sectors like the Kuwait Industrial Area and Ardiya, and investment storage, which requires specific figures and statistics for understanding the extent of the problem and its resolution. He emphasized that providing warehouses is the solution, but detailed planning and timely execution are essential. Addressing both the workers’ housing and storage issues concurrently, he highlighted their dual impact, urging for suitable worker accommodations away from residential areas to prevent health and social issues, as evidenced during the COVID-19 pandemic.

Innovative solutions by Yersha’s Public Relations Director, Ghaith Al-Yousef, involved utilizing ample spaces for controlled and efficient storage. The company pays 9 dinars per container for installing electricity within their storage zones, enforcing penalties for delayed goods, up to 80 dinars per container, depending on the duration, paid by the local agent until the container’s release, with a monthly rate for Yersha ranging from 250 to 300 containers approximately.

Additional storage spaces are necessary.” Al-Yousef expressed optimism about resolving these issues following the establishment of a closed government company dedicated to establishing, managing, and operating public storage areas for food and pharmaceutical products (the Kuwait Storage Company). Real estate expert Suleiman Al- Dulaijan noted that 80 to 85% of investment buildings have basements ranging from 750 to 1000 meters in area. He suggested that the correct solution to the storage problem is to delay the implementation of decisions until safe storage areas are established within six months. Additionally, if storage is permitted, it must comply with legal standards, emphasizing security and safety measures such as fire sprinklers and effective fire supervision to prevent incidents like the Al-Mangaf tragedy.

By Marwa Al-Bahrawi
Al-Seyassah/Arab Times Staff