Business Monitor International


Kuwait Real Estate Report

Published 05 November 2014

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

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. H owever ,   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.

Additionally, although Kuwait itself is politically stable and is considered one of the most democratic states in the GCC, business in the country is nevertheless put at risk by the region's less stable states. In 2014 Iraq has been ravaged by its internal conflict with the Islamic State (IS), while Syria remains in a state of civil war. If the conflict with IS shows signs of spreading beyond Iraq's borers, it could pose serious risks to the economy of the wider...

Table of Contents

BMI Industry View
7
SWOT
9
Political
11
Economic
12
Business Environment SWOT
13
Industry Forecast
15
Office
15
Table: Forecast Office Rents, 2014-2015(KWD/sq m/month)
15
Table: Forecast Office Net Yields, 2011-2018 (%)
16
Retail
16
Table: Forecast Retail Rents, 2014-2015 (KWD/sq m/month)
17
Table: Forecast Retail Net Yields, 2011-2018 (%)
17
Industrial
17
Table: Forecast Industrial Rents, 2014-2015 (KWD/sq m/month)
18
Table: Forecast Industrial Net Yields, 2011-2018 (%)
18
Construction And Infrastructure Forecast Scenario
18
Table: Construction And Infrastructure Industry Data (Kuwait 2012-2017)
18
Table: Construction And Infrastructure Industry Data (Kuwait 2018-2023)
19
Construction And Infrastructure Forecast Scenario
20
Macroeconomic Forecasts
24
Economic Analysis
24
Government Consumption Outlook: Pickup In Growth
26
Fixed Investment: Finally Looking More Positive
27
Net Exports Outlook: Limited Growth Opportunities Ahead
29
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, H213
38
Table: Historical Rental Costs, 2012-2014 (KWD per m2/month)
38
Table: Net Yields, 2012-2014 (%)
39
Retail
39
Table: Terms Of Rental Contract/Leases, H213
40
Table: Historical Rental Costs, 2012-2014 (KWD/sq m/month)
40
Table: Net Yields, 2012-2014 (%)
41
Retail Sales Indicators
41
Table: Retail Sales Indicators, 2010-2017
41
Industrial
41
Table: Terms Of Rental Contracts/Leases, H213
42
Table: Historical Rental Costs, 2012-2014 (KWD/sq m/month)
43
Table: Net Yields, 2012-2014 (%)
43
Competitive Landscape
44
Company Profile
45
National Real Estate Company (NREC)
45
Pearl Of Kuwait Real Estate Company
47
Salhia
49
Tamdeen Group
51
United Real Estate Company (URC)
53
Demographic Forecast
55
Table: Kuwait's Population By Age Group, 1990-2020 ('000)
56
Table: Kuwait's Population By Age Group, 1990-2020 (% of total)
57
Table: Kuwait's Key Population Ratios, 1990-2020
58
Table: Kuwait's Rural And Urban Population, 1990-2020
58
Methodology
59
Industry Forecast Methodology
59
Sources
60
Risk/Reward Ratings Methodology
60
Table: Real Estate Risk/Reward Ratings Indicators
62
Table: Weighting Of Indicators
63

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

BMI Industry View

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-2018 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 Rankings

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

The rankings 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