As a preview to the upcoming premier real estate investment and development event – Cityscape Kuwait, being held on December 9-11 – this exclusive event introduced some of the most important themes that will take place during the exhibition at the Kuwait International Fairgrounds in Mishref.
The various high-profile discussions centered on possible changes to the economic framework of the GCC states due to natural resource instabilities, while stressing real estate will play a significant role in long-term economical sustainability with the region.
“In analyzing the real estate market in Kuwait, it is important to broaden the landscape to include a global scope. Historically, Kuwaiti citizens and residents have pioneered overseas property investments by setting the trends for real estate hotspots. By discussing the current state of the Kuwaiti real estate market, there is also a need to expand the topic to cover transnational areas which have typically been points of attraction for Kuwait-based investors,” said Ahmed Zakaria, Exhibition Manager of Cityscape Kuwait, in his welcome note at the Business Breakfast.
Tawfikh Al-Jarrah, Chairman of the Kuwait Real Estate Union, stressed in his opening speech at the event: “the core issue in the real estate business in Kuwait is limitation of land, noting that in Kuwait; only 63 square meters of land is obtainable per person whereas 194 m2 per person is obtainable in Bahrain, 468 m2/person in Dubai and 171m2/person in Riyadh, causing pressure on land prices and contributed to its significant rise. He also added that “Kuwait suffers from a large gap in private housing, noting that it is expected that the number of new requests for housing over the next twenty years will be 234 000, bringing the total number of applications to 352 000.”
As for the monthly rental rate, Al-Jarrah said that there is a clear rise in the rental rate, with an average monthly rental rate of 313 KWD, while in the last year it amounted to 264 KWD, describing that this sector is doing well in terms of performance and stability.
Commenting on office building sector, Al-Jarrah said: "There is a wave of improvement that have been accompanying the sector since 2011, in which the occupancy rate fell to 60 per cent, but now they are up to 85 per cent."
Tawfiq Al-Jarrah also pointed to the high occupancy rate in the retail sector, as the total retail space has reached about 800 thousand square meters in the second quarter of this year, with an occupancy rate of 95 per cent with high rental prices.
The influential panel chosen to speak at the Kuwait Business Breakfast gathered experts from a cross-section of the business world. From the media sector, Ahmed Bou Merhi, Head of Kuwaiti Business News at Al Arabiya News Channel and Head of the Business Department at Al-Anbaa newspaper, moderated the panel.
As a panelist at the Business Breakfast, Naser Faisal Alkhaled, Head of Real Estate Funds at Global Investment House, said Kuwait has limited real estate opportunities in comparison with UAE market which is a big and lucrative market”. On the other hand he confirmed that the housing real estate sector in Kuwait is currently witnessing tremendous growth in demand.
Analyzing other real estate markets in GCC, AL Khaled said: “KSA market is the strongest in terms of demands and offers best investments opportunities while both Qatar and Bahrain are relatively small markets.
Another panelist at Cityscape Kuwait Business Breakfast was Bassam Al-Othman, Executive Vice-President, Kuwait Financial Centre – Markaz, who elaborated: “saying if oil prices reach 55-70 USDthe impact on the real estate sector will be minimal and that applies on all of KSA, UAE markets subject to their economic dependence on oil”.
From the real estate investment sector, Rami Echo, Chief Investment Officer at Alargan, discussed: “The demand for residential properties will always be in demand whether the economic situation is improved or not, while the infrastructure in the investment projects will be affected which will lead to some postponement g of some projects.
He asserted that “financial flows from the Gulf countries to America and Europe will be affected because the financial surplus is likely to fall due to lower oil prices. As a result of the fear of investing abroad, Kuwaiti investors will rise their investments in local real estate companies and funds.
And in turn, Mr. Mahmoud Al Tararoah, CEO of Bazaar Real Estate, said: "There is not a strong correlation between the decline in oil prices and the real estate market; the decline of the first does not affect the second respectively."
"The best time to buy property for speculative purposes is within the beginnings of market recovery." added Al-Tararwah pointing out that the trading volume in 2014 reached 4.8 billion Kuwaiti Dinars, after the it reached 4.4 billion dinars in 2007 ."
Another panelist, Abdullah Al-Abdooli, Managing Director at Al Marjan Island, stated: Al-Marjan Island project located in Ras Al Khaimah, referring to the distinctive elements of the project in terms of location and the attractive factors that were key factors in selling 30 per cent of the project before completion.
"The project extends over an area of 2.7 million square meters, while the construction area occupies 60 million square feet. The project includes 550 residential villas and 8,000 hotel rooms" added Abdoulie, stating that Kuwaiti investors possess the lion's share of investment in the project..
The Cityscape Business Breakfast greatly helped in setting the new era of diversified investments in real estate as the convenient and safe sector to secure sustainable return on investment.
About Cityscape KuwaitCityscape Kuwait is the premier real estate investment and development event in Kuwait. Another event from the world renowned Cityscape portfolio of events, it is the meeting place for real estate developers, private and institutional investors, architects, consultants and other real estate providers to network and do business.
Featuring a large-scale exhibition, business breakfast, a content driven business forum and investment series and other networking events, Cityscape Kuwait will bring together key decision-makers from the public and private sectors, supporting development, bringing transparency and encouraging collaboration.
Cityscape Kuwait takes place with the support of Official Banking Sponsor National Bank of Kuwait, Platinum Sponsor Al Hamra Real Estate Development and Gold Sponsor Al Marjan Island.