New warehouse licenses prioritized after Mangaf fire sparks storage crisis

• The ‘tragedy’ of the Mangaf fire has imposed a new reality on the government and the private sector in Kuwait, necessitating a compulsory procedural path to reorganize the real estate “single buildings” and storage landscape in the country.

• The prices of the Shuwaikh, Al-Rai, and Al-Ardiya stores dedicated to food ranged between four and seven dinars per square meter ‘before the Mangaf fire,’ and their areas ranged from 500 to 1,000 meters, emphasizing the difficulty of finding small, individual spaces in those areas

Licensing the establishment of new warehouses in the country has become a top priority following the impacts of the Mangaf fire, which exposed the severe storage crisis and the high prices of approved warehouses. This situation is expected to affect consumers’ pockets due to the increased costs of storing goods, according to Al Rai newspaper.

The ‘tragedy’ of the Mangaf fire has imposed a new reality on the government and the private sector in Kuwait, necessitating a compulsory procedural path to reorganize the real estate “single buildings” and storage landscape in the country.

This systematic shake-up is expected to lead to fundamental organizational changes, which in turn will increase the cost of storage and housing rentals. These changes will also affect companies’ labor costs, subsequently raising the pricing of tenders expected to be launched in the coming period under the heading of higher quality and operating expenses.

The fire in Mangaf has significantly and rapidly increased the rents for warehouses and bachelor’s buildings. Prices are expected to rise further if solutions are not proposed to create new storage spaces and residential alternatives with high standards of security and safety. These measures aim to eliminate the spread of housing chaos, alongside the government’s strict stance against random warehouses and its commitment to punishing violators.

Real estate experts stressed to Al-Rai newspaper that real estate dealers will face significant difficulties, especially those who allowed some apartments to be rented as warehouses, in light of the lack of supervision, particularly since some have tampered with engineering spaces in a manner contrary to what was approved in the municipality’s license.

They pointed out that the short period following the tragedy saw a noticeable increase in warehouse rental prices by about 40 percent, with an expected rise of 100 percent if the state does not provide storage alternatives for many investors who were using the basements of illegal buildings as warehouses. There are fears that this will lead to an increase in the prices of goods and merchandise for consumers.

Meanwhile, informed sources told Al-Rai that the list of renting stores is determined based on the type of activity. For example, the prices of the Shuwaikh, Al-Rai, and Al-Ardiya stores dedicated to food ranged between four and seven dinars per square meter ‘before the Mangaf fire,’ and their areas ranged from 500 to 1,000 meters, emphasizing the difficulty of finding small, individual spaces in those areas. Car warehouse prices range between 1.25 dinars and 1.5 dinars per square meter.