BMI View: We believe that the real estate sector in Kuwait will increase in some sectors and remain stable in others due to a reduction of oversupply in the office and retail subsectors. However, without a significant change in the supply and demand dynamic, we predict that there will be no change to net yields in 2014 for all subsectors.
Kuwait's commercial real estate sectors are developing in different directions and at varying rates. Overall market sentiment remains positive and signs generally point towards a recovery after several difficult years. The most recent data and market news corroborates our expectations that the market is stabilising and increasing in some subsectors. The sector continues to be characterised by frequent, although ultimately minor, fluctuations in rental rates.
While BMI is generally optimistic about Kuwait, there are several pitfalls to the current scenario. One significant one is if soft market conditions 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.
Future evolutions in Kuwait's political sphere 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 3.0% for 2013, slowing slightly to 2.6% in 2014. We remain cautious about Kuwait's fixed investment outlook, and note that political evolutions will continue to present both upside and downside risks to our growth forecasts.
Government stimulus measures continue apace but growth remains dampened as project delays and claims of corruption impede development. Low growth is expected throughout the forecast period to 2022, with the highest rate being at 3.3% y-o-y in 2013.
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.
- 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).
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.
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.
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.
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.