The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.The outlook for Kuwaits real estate sector remains positive. The market is recovering, backed by increased government spending and robust economic growth. The most recent full year data from 2011 corroborates our prior forecast that 2011 would see a stabilisation in the market, and although the top line figures hint at slight volatility, contractions were in line with market correction, and gradual growth returned as the main course of the market.
In the short term, the office market – in spite of historic oversupply – is posting steady growth rates, which although nowhere near their pre-crisis peak, have settled into a positive growth trajectory. Of the three sub-sectors that we analyse, BMI believes that retail holds the greatest potential in the longer term due to positive underlying fundamentals.
Key Opportunities- The KWD37bn Kuwait Development Plan is expected to stimulate growth in the residential sector, while the Kuwait Investment Authority will invest KWD1bn in the commercial and investment segments. Projects being developed include the construction of the business hub Silk City at an estimated cost of US$77bn. Large infrastructure projects in the pipeline, such as a new railway and metro system, will also be a springboard for further sector expansion.
- Kuwaits robust economic outlook – driven by increasing hydrocarbons prices, rising oil export revenues and a strong diversification policy – underpins the sector. According to the IMF, Kuwaits economy is projected to expand by 4.4% in 2011, and we forecast further growth to average at 4.0% through to 2015. We believe that Kuwaits economy will only slightly be affected by the political tensions that started in early 2011.
- Long-term opportunities in the retail sector through tourism, the high number of expatriates, urbanisation and increased consumer spending power.
Key Risks - As levels of domestic discontent appear to be rising, we see a growing possibility that this unrest could translate into more pronounced political instability in Kuwait going forward.
- If demand dynamics do not improve in accordance with the schedules increase in GLA to come online, market conditions will soften further.
Click for Report details:Kuwait Real Estate Report Q2 2012
