Market Report, "Kuwait Real Estate Report Q2 2011", published

New Business market report from Business Monitor International: "Kuwait Real Estate Report Q2 2011"
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March 27, 2011 - PRLog -- While still subdued, Kuwait's commercial property market has been showing signs of improvement. Official figures from Kuwait's Department of Real Estate Registration and Authentication show a 47% year-on-year (y-o-y) increase in the number of real estate transactions in 2010. Most of these were for residential property, up 52% y-o-y. The number of commercial property deals increased by 19% y-o-y. The total value of commercial property transactions in 2010 was KUD228mn.

Our sources expect that the fortunes of Kuwait's commercial real estate market will reach a turning point in 2011. The market is looking for rental rates to rise by around 10-15% across all sub-sectors. One particular challenge for the real estate sector is over-supply. This is true for all three cities from which we gather data - Kuwait City, Salmiya and Al-Jahara - and all sub-sectors. Outside Kuwait City, where the reported vacancy rates have been 30%, our sources indicated that around 10-15% of total space remained vacant.

The 2009 economic downturn acted as a warning signal for Kuwait's oil-reliant economy and prompted the government to announce in 2010 a five-year plan for development, diversification and growth. We forecast Kuwait's economy to continue its recovery and grow 3.4% in 2011, from an estimated 2.0% in 2010, before accelerating through 2015 averaging 4.0% annually. We forecast private consumption growth in 2011 to remain relatively subdued at 2.0%. Beyond 2011, however, as the development plan feeds through into the country's economy, private consumption is forecast to pick up and grow at a constant pace of 4.5% through 2015.

According to a business sentiment study by Dun and Bradstreet, released on February 11 2011, business optimism going into Q111 was up significantly. Their Business Optimism Index (BOI) for Kuwait is higher in both the hydrocarbon and non-hydrocarbon sectors. The BOI for the non-hydrocarbon sector is the highest since reporting began in Q309.

The flare-up in tensions across the Middle East and North Africa (MENA) since the start of 2011 has significantly altered investors' risk perceptions of the region. It is nevertheless increasingly apparent that previous assumptions surrounding regime stability and hence, growth potential, need to be revisited. In Kuwait, protests are being organised and citizens are demanding more rights. The interior minister has had to resign over a scandal. In our view, the economies of oil exporters such as Kuwait could benefit financially from the unrest, particularly should an uptick in risk aversion push global energy prices higher. Also, pressure on public finances may increase, with regional governments likely to ramp up spending in a bid to pre-empt any large-scale demonstrations.

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Report Table of Contents:

SWOT Analysis
- Kuwait Real Estate/Construction SWOT
- Kuwait Economic SWOT
- Kuwait Business Environment SWOT
Real Estate Market Overview
- Table: Kuwait's Real Estate Market - Rentals, 2009 And 2010 (KWD, per square metre per month)
- Table: Net Yields, 2010 And 2011 (%)
- Table: Terms Of Rental Contract/Lease, Mid-2010
- Table: Available And Vacant Space, Mid-2010 (m2)
Forecast Scenario
- Table: Real Estate Markets - Rentals, 2010-2011 (m2/month, KWD)
- Table: Forecast Yield, 2008-2015 (%)
- Construction Industry Outlook
- Table: Kuwait Construction And Infrastructure Industry Data 2007-2015
- Table: Kuwait Construction And Infrastructure Industry Data 2012-2020
- Construction And Infrastructure Forecast Scenario
- Macroeconomic Outlook
- Table: Kuwait - Economic Activity; 2006-2015
Business Environment
- Real Estate/Construction Business Environment Rating
- Table: Middle East And Africa Real Estate/Construction Business Environment Ratings
- Kuwait's RECBER
- Project Finance Ratings: Outlook For Middle East
- Table: Design And Construction Rating
- Table: Commissioning And Operating Rating
- Table: Overall Project Finance Rating
- Kuwait's Business Environment
- Table: BMI Business And Operational Risk Ratings
- Table: BMI Legal Framework Ratings
- Table: Labour Force Quality
- Table: Foreign Direct Investment Inflows Into The Middle East And Africa, 2006-2008
- Table: BMI Trade Ratings
- Table: Kuwait's Top Export Destinations, 2000-2008 (US$mn)
Company Monitor
- National Real Estate Company
- Pearl Of Kuwait Real Estate Company
- Salhia
- Tamdeen Group
- United Real Estate Company (URC)
BMI Methodology
- How We Generate Our Industry Forecasts
- Construction Industry
- Bank Lending
- Real Estate/Construction Business Environment Rating
- Table: Weighting Of Indicators
- Project Finance Ratings Indicators
- Table: Design And Construction Phase
- Table: Commissioning And Operating Phase - Commercial Construction
- Table: Commissioning And Operating Phase - Energy And Utilities
- Table: Commissioning And Operating Phase - Transport
- Sources

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Business Monitor International (BMI) offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities, across 175 markets.  BMI offers three main areas of expertise: Country Risk BMI's country risk and macroeconomic forecast portfolio includes weekly financial market reports, monthly regional Monitors, and in-depth quarterly Business Forecast Reports.  Industry Analysis BMI covers a total of 17 industry verticals through a portfolio of services, including in-depth quarterly Country Forecast Reports.  View more research from Business Monitor International at

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.
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Tags:Estate, Construction, Ratings, Property, Estateconstruction, Rental, Infrastructure, Finance, 10-15, Subdued
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