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Kuwait Real Estate Report Q1 2015

  • ID: 3041998
  • November 2014
  • Region: Kuwait
  • 67 pages
  • Business Monitor International
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BMI View: Over the long term the Kuwaiti real estate sector continues to provide enticing opportunities.

The country enjoys immense oil wealth and high GDP per capita, while government initiatives are supporting an increasingly dynamic private sector. However, we believe that forecast growth in the sector will be pushed back several years due to developments in 2014. The drop in the price of oil and political instability in the region surrounding Kuwait has meant that the Kuwaiti economy is not growing as quickly as previously forecast, and thus supply continues to outpace demand in the real estate sector.

Demand for commercial real estate is set to grow in Kuwait, as the country has a stable government and generally offers a supportive business environment to investors. Due to the country's vast oil wealth, the populace enjoyed a per capita GDP of USD54,341 in 2014. This provides consumers with ample purchasing power to support the rapidly developing retail sector. However, this also means that recent declines in the price of oil will have a particularly great impact on the Kuwaiti economy, as exports, overwhelmingly dominated by oil, amount to 68.8% of GDP. The price of oil fell by over 20% in the four months after peaking in mid June 2014. In the past the government of Kuwait has made efforts to diversify the economy,
such as 2010's USD102bn plan to expand the private sector, however benefits have been slow to materialise, a fact which many blame on the country's bloated bureaucracy.

Note: Product cover images may vary from those shown
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BMI Industry View 7

SWOT 10

Political 12

Economic 13

Industry Forecast 14

Office 14
Table: Forecast Office Rents, 2014-2015(USD/sq m/month) 14
Table: Forecast Office Net Yields, 2011-2018 (%) 15

Retail 15
Table: Forecast Retail Rents, 2014-2015 (USD/sq m/month) 16
Table: Forecast Retail Net Yields, 2011-2018 (%) 16

Industrial 16
Table: Forecast Industrial Rents, 2014-2015 (USD/sq m/month) 17
Table: Forecast Industrial Net Yields, 2011-2018 (%) 17

Construction And Infrastructure Forecast Scenario 17
Table: Construction And Infrastructure Industry Data (Kuwait 2012-2017) 17
Table: Construction And Infrastructure Industry Data (Kuwait 2018-2023) 18

Construction And Infrastructure Forecast Scenario 20

Macroeconomic Forecast 26

Macroeconomic Forecasts 26

Household Consumption: Positive Outlook Remains 27

Government Consumption Outlook: Pickup In Growth 28

Fixed Investment: Finally Looking More Positive 29

Net Exports Outlook: Consumption To Weigh On Oil Exports 30

Political Risk At The Fore 32
Table: Kuwait - Economic Activity 32

Industry Risk Reward Ratings 33

Middle East And Africa - Risk/Reward Index 33
Table: Middle East And Africa Real Estate Risk/Reward Index 33

Kuwait - Risk/Reward Ratings 34

Rewards 34

Risks 34

Market Overview 36

Kuwait City 37

Salmiya 38

Al-Jahara 38

Office 38
Table: Terms Of Rental Contract/Leases, H114 40
Table: Historical Rental Costs, 2012-2014 (USD/sq m/month) 40
Table: Net Yields, 2012-2014 (%) 41

Retail 41
Table: Terms Of Rental Contract/Leases, H114 42
Table: Historical Rental Costs, 2012-2014 (KWD/sq m/month) 42
Table: Net Yields, 2012-2014 (%) 43

Industrial 43
Table: Terms Of Rental Contracts/Leases, H114 44
Table: Historical Rental Costs, 2012-2014 (KWD/sq m/month) 44
Table: Net Yields, 2012-2014 (%) 45

Competitive Landscape 46

Company Profile 48

National Real Estate Company (NREC) 48

Pearl Of Kuwait Real Estate Company 50

Salhia 52

Tamdeen Group 55

United Real Estate Company (URC) 57

Demographic Forecast 59
Table: Kuwait's Population By Age Group, 1990-2020 ('000) 60
Table: Kuwait's Population By Age Group, 1990-2020 (% of total) 61
Table: Kuwait's Key Population Ratios, 1990-2020 62
Table: Kuwait's Rural And Urban Population, 1990-2020 62

Methodology 63

Industry Forecast Methodology 63

Sources 64

Risk/Reward Index Methodology 65
Table: Real Estate Risk/Reward Index Indicators 66
Table: Weighting Of Indicators 67

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National Real Estate Company (NREC)
Pearl Of Kuwait Real Estate Company
Salhia
Tamdeen Group
United Real Estate Company (URC)

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Note: Product cover images may vary from those shown

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