By Cavendish Maxwell, a leading property consultancy and chartered surveying firm in the Middle East.
Cavendish Maxwell released its first Kuwait Property Market Report for 2018-2019, comprising key property data and trends for the Kuwaiti real estate industry. The industry report was compiled by the firm's in-house strategic consulting and research team, and covers key data and overviews into the residential, retail, office and industrial, and hospitality sectors.
Commenting on the report, Manika Dhama, Associate Partner, Strategic Consulting and Research at Cavendish Maxwell, said: “Kuwait’s economy is still largely driven by its oil sector. However, some sectors, retail in particular, have shown robust performance, second only the UAE’s (Dubai). We also saw the residential property market record strong transaction figures, but it remains to be seen how the upcoming supply will impact prices and rents. The strategic projects under the New Kuwait 2035 Plan are expected to encourage more foreign direct investment into the economy. This could encourage business growth and stimulate the economy further.”
Key market insights
In 2018, the oil sector accounted for approximately 55% of Kuwait’s total GDP, while the non-oil sector grew by compound annual growth rate (CAGR) of 4% from 2010 to 2018.
Sales of residential properties, particularly in the investment (apartment) category, have been strong since the downturn in 2017. Rising prices and an increase in the volume of transactions indicated positive performance in 2018. More stable rents also contributed to the rise in sale prices for both apartments and villas.
Several projects are scheduled for completion in Kuwait in line with the New Kuwait Vision 2035 plan. This includes major mixed-use developments including Tamdeen Square in Sabah Al Salem, and Al Andalous Complex in Hawalli. Commercial and residential projects include the proposed Al Basma Tower in Kuwait City, and Al Warba Island Residential Tower on Al Warba Island.
Kuwait’s retail sector showed robust growth in 2018, with several big brands entering the market as a result of citizen’s high spending power. New malls and expansions have been announced, to add to the existing 50 malls of varying scale, quality and tenant mix.
Kuwait’s office market performance was less than robust, with large amounts of space still vacant. Oversupply and limited demand due to overall regional downturn have impacted the market. The only free trade zone in Kuwait, Shuwaikh, was also shut down in 2019 after a decision by the Council of Ministers to cancel the programme.
As part of the New Kuwait Vision 2035 plan, the government is set to embark on the creation of five island destinations – Bubiyan, Warba, Failaka, Maskan and Aouha – to boost tourism and leisure offerings in the country. Seven new hotels are either in the construction or near completion.
For more detailed information and sector-specific overviews, download your copy of the 2018-2019 Kuwait Property Market Report from Cavendish Maxwell.