Business Monitor International


Kuwait Real Estate Report

Published 12 February 2014

  • 64 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
Kuwait Real Estate Report

BMI View: We believe the real estate sector in Kuwait will see some increases in rental costs due to a reduction of oversupply in the office and retail sub - sectors. However, without a significant change in the supply and demand dynamic, there will be no change to net yields in 2014 for all sub - sectors.

While BMI is generally optimistic about Kuwait, there are several pitfalls to the current scenario. Soft market conditions could persist, particularly in the office segment, where dynamics are still dictated by a legacy of oversupply. Our outlook would also be considerably tempered should political uncertainty in the country or its neighbours escalate.

Changes in Kuwait's political situation, or that of its neighbours, such Iraq, will continue to present substantial risks to our growth forecasts. The Kuwaiti economy will remain on a moderate expansion path heading into 2014, with growth supported by robust private consumption and a modest rise in oil production and exports.

We forecast real GDP growth of 2.6% in 2014, and remain cautious about Kuwait's fixed investment outlook, noting that political evolutions will continue to present both upside and downside risks to our forecasts. Government stimulus measures continue apace, but project delays and claims of corruption impede development.

Recent Developments

  • The National Bank of Kuwait announced a 75% increase in the value of sales in the commercial real estate sector, up to KD440mn in 2013.

  • Kuwait-based United Real Estate Company (URC) has sold 10 of its plots in the Mubarakiya area in Kuwait and two plots in Entertainment City, Qatar. It made the sales for US$46.7mn, making a combined net profit of US$9.7mn. The 10 Mubarakiya plots cover a total area of around 1,295 square metres, representing 1% of URC's total assets with a book value of US$16.3mn, giving the company a net profit of US$3.1mn. The sale of the Entertainment City plots generated around US$6.6mn.

Key BMI Forecasts

  • Rental rates...

Table of Contents

BMI Industry View
7
SWOT
8
Political SWOT
10
Economic SWOT
11
Business Environment SWOT
12
Industry Forecast
14
Office
14
Table: Forecast Office Rents, 2013-2014 (KWD per m2/month)
14
Table: Forecast Office Net Yields, 2011-2018 (%)
15
Retail
15
Table: Forecast Retail Rents, 2013-2014 (KWD per m2/month)
15
Table: Forecast Retail Net Yields, 2011-2018 (%)
16
Industrial
16
Table: Forecast Industrial Rents, 2013-2014 (KWD per m2/month)
16
Table: Forecast Industrial Net Yields, 2011-2018 (%)
17
Construction And Infrastructure Forecast Scenario
17
Table: Kuwait Construction And Infrastructure Industry Data, 2011-2016
17
Table: Kuwait Construction And Infrastructure Long-Term Forecasts, 2017-2022
19
Construction And Infrastructure Forecast Scenario
20
Macroeconomic Forecasts
24
Economic Analysis
24
Table: Kuwait - Economic Activity
31
Industry Risk Reward Ratings
32
Middle East And Africa Risk/Reward Ratings
32
Table: Middle East And Africa Real Estate Risk/Reward Ratings
32
Kuwait - Risk/Reward Ratings
33
Rewards
33
Risks
33
Market Overview
35
Kuwait City
36
Salmiya
36
Al-Jahara
36
Office
37
Table: Terms Of Rental Contract/Leases, H212
38
Table: Historical Rental Costs, 2012-2013 (KWD per m2/month)
38
Table: Net Yields, 2012-2013 (%)
39
Retail
39
Table: Terms Of Rental Contract/Leases, 2013
40
Table: Historical Rental Costs, 2012-2013 (KWD per m2/month)
40
Table: Net Yields, 2012-2013 (%)
41
Retail Sales Indicators
41
Table: Retail Sales Indicators, 2010-2017
41
Industrial
41
Table: Terms Of Rental Contracts/Leases, 2013
42
Table: Historical Rental Costs, 2012-2013 (KWD per m2/month)
43
Table: Net Yields, 2012-2013 (%)
43
Competitive Landscape
44
Company Profile
45
National Real Estate Company (NREC)
45
Pearl Of Kuwait Real Estate Company
47
Salhia
49
Tamdeen Group
52
United Real Estate Company (URC)
54
Demographic Forecast
56
Demographic Outlook
56
Table: Kuwait's Population By Age Group, 1990-2020 ('000)
57
Table: Kuwait's Population By Age Group, 1990-2020 (% of total)
58
Table: Kuwait's Key Population Ratios, 1990-2020
59
Table: Kuwait's Rural And Urban Population, 1990-2020
59
Methodology
60
Industry Forecast Methodology
60
Sources
61
Risk/Reward Ratings Methodology
61
Table: Real Estate Risk/Reward Ratings Indicators
63
Table: Weighting Of Indicators
64

The Kuwait Real Estate Report features Business Monitor International (BMI)'s market assessment and independent forecasts of major construction projects in the residential and commercial markets, plus rental prices and yields in major cities. The report critically analyses the prospects for real estate within the broader economic and financial context - both domestic and global - via our econometrically-modelled and clearly explained banking and economic forecasts and follows this through to evaluate the implications for REITs.

BMI's Kuwait Real Estate Report provides industry professionals and strategists, sector analysts, business investors, trade associations and regulatory bodies with independent forecasts and competitive intelligence on the real estate industry in Kuwait.

Key Benefits

  • Benchmark BMI's independent real estate industry forecasts for Kuwait to test other views - a key input for successful budgeting and strategic business planning in the Kuwaiti real estate market.
  • Target business opportunities and risks in Kuwait through our reviews of latest industry trends, regulatory changes and major deals, projects and investments.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. SWOTs, KPIs and latest activity).

Coverage

Executive Summary

Summary of BMI's key industry forecasts, views and trend analysis covering real estate and construction, regulatory changes, major investments and projects and significant national and multinational company developments.

Industry SWOT Analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the real estate sector and within the broader political, financial, economic and business environment.

Market Overview

Overview of the real estate sector, including analysis of existing/planned real estate developments and emerging industry trends in the office, industrial and commercial sectors.

Market Analysis

Features detailed city-level data and analysis on rental prices, yields, contract terms and real estate availability with separate chapters covering the office, retail and industrial sub-sectors.

Industry Forecast Scenario

Historical data series (2010-2012) and forecasts to end-2017 for the domestic real estate industry and for the local and global finance industry. Indicators include:

Real Estate: Office, retail and industrial real estate yields for all major cities (%); short-term forecasts on minimum and maximum real estate rental prices by sub-sector (US$ per square metre, and local currency per square metre)

Construction: Industry value (US$bn); contribution to GDP (%); employment (`000); real growth (%)

Economy: Economic growth (%); nominal GDP (US$bn); unemployment (%); interest rates (%); exchange rate (against US$)

Business Environment Ratings

BMI's Real Estate Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (real estate vendors, construction companies and financial investors) in the regional real estate market.

The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape to generate Company SWOT analyses.

The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc