Real Estate & Construction
From The Report: Kuwait 2016
View in Online Reader

Real estate has long been a mainstay of Kuwait’s non-oil economy, while its construction industry is among the strongest in the region and a rising star in the non-oil economy, with its growing population, tightly regulated land market and wealthy populous all combining to fuel demand for new building. In 2014 the two industries together accounted for 10.6% of non-oil GDP. Although a range of factors, including lower oil prices, have affected growth projections across the GCC, Kuwait’s real estate sector is particularly well-poised to face lower prices, with residential the largest segment by both sales and number of transactions, with sales reaching $4.6bn in 2015.

This chapter contains interviews with Khaled Al Mashaan, Vice-Chairman and CEO, ALARGAN International Real Estate; Ahmad Kasem, Deputy CEO, United Real Estate Company; and Osama Jawad Bukhamseen, Executive Director, Bukhamseen Holding; and Chairman, Engineering Group.

Articles from this Chapter

Overview

Confidence building: Property markets have remained healthy, recording price increases in some segments despite economic headwinds
OBG
plus

Real estate has long been a mainstay of Kuwait’s non-oil economy. In 2014 real estate and construction services together accounted for 10.6% of non-oil GDP, according to the IMF. Although a range of factors, including lower oil prices, have affected growth projections across the GCC, Kuwait’s real estate sector is particularly well-poised to face lower prices. The country’s strong macroeconomic fundamentals, including a high per capita GDP, stable inflation and recent budget surpluses worth…

Interview

Striking a balance: OBG talks to Khaled Al Mashaan, Vice-Chairman and CEO, ALARGAN International Real Estate
OBG
plus

Interview:Khaled Al Mashaan How would you assess the balance between mid-market and upper-market development in the sector, and are investors responding? KHALED AL MASHAAN: The real estate sector is vast, with its many sectors including commercial, residential, industrial, retail and warehousing. In terms of the middle and upper segments of the residential market, the aim of the sector is to strike a healthy balance between them. The central issue in the residential market is that it’s…

Interview

An opportune time: OBG talks to Ahmad Kasem, Deputy CEO, United Real Estate Company
OBG
plus

Interview:Ahmad Kasem How far might the continued growth of vacant apartments affect rental and building prices in the short to medium term? AHMAD KASEM: The vacancy factor in Kuwait’s residential market is often overstated. A number of apartments are used as second homes or weekend getaways close to the city and beaches. There are also consistent vacancy levels in some smaller-sized properties which are traditionally rented by expats. This, however, is to be expected due to the changing…

Analysis

Recalibrated lending: Implementing Basel III requirements is set to change incentive structures for bank financing
OBG
plus

In the wake of the 2008 global financial crisis, banking sectors around the world introduced steps to mitigate future risks and create more stress-resilient financial institutions with the Basel III regulations. Due to their effects on bank liquidity, these requirements could have important implications for Kuwait’s real estate sector. As the country’s financial institutions implement tighter capital requirements, the industry could see changes in capital availability and lending costs during…

Overview

Brick by brick: Authorities are pressing ahead with big-ticket projects despite cutbacks elsewhere
OBG
plus

The construction industry in Kuwait is among the strongest in the region and a rising star in the country’s non-oil economy, with its steadily growing population, tightly regulated land market and relatively wealthy populous all combining to fuel demand for new building. Between 1995 and 2013, Kuwait’s population doubled from 1.8m to 3.6m, according to data from the UN Department of Economic and Social Affairs, with mid-year estimates for 2015 at around 3.9m. Despite this rapid growth, just 6-7%…

Interview

Spreading the benefits: OBG talks to Osama Jawad Bukhamseen, Executive Director, Bukhamseen Holding; and Chairman, Engineering Group
OBG
plus

Interview:Osama Jawad Bukhamseen Are lower raw material prices being passed off to end-consumers, and could rising labour costs offset any potential benefits to consumers? OSAMA JAWAD BUKHAMSEEN: Raw material prices and labour costs do not necessarily correlate. There are too many variables in determining their respective costs, such as the cost of fuel, regional instabilities, and other commercial and political factors. In the end, what the end-user stands to gain through the fluctuation…

Analysis

From strength to strength: Changing laws governing PPPs have attracted more private capital for infrastructure projects
OBG
plus

Across the GCC, governments have strengthened their commitments to major capital expenditure in spite of the prevailing oil price environment. To offset the cost of this spending, officials have been working to recruit help from the private sector through public-private partnerships (PPPs). In November 2015 authorities in Dubai implemented a new PPP law, which was expected to loosen restrictions in the emirate’s projects market and provide funding for major construction programmes, such as the…