Kuwait finally joins the boom

[Skoulikimou]

Kuwait finally joins the boom
By Jon Gorvett
June 21, 2006

The sound of jackhammers, pile drivers and bulldozers is a common dawn chorus in Kuwait these days as the emirate's construction sector plays catch-up with its Gulf neighbors.

Until very recently, this nation of nearly three million had not been lucky in attracting investment in bricks and mortar. The Iran-Iraq war, a major financial crash in the late 1980s, invasion by Iraq in 1990 and fears that invasion might happen again meant that even Kuwaitis themselves kept their money elsewhere.

But since 2003 and the overthrow of Saddam Hussein, things have started to boom. Arab investment has been flowing into the country, while many companies worried by the security situation next door in Iraq have turned to Kuwait as a base for regional operations.

Meanwhile, huge budget surpluses created by record oil prices have left the Kuwaiti government and local investors with more money than places to put it - producing new projects.

"Demand for commercial real estate is expected to boom in the coming years," said Shailesh Dash of Global Investment House, a Kuwait-based investment company. "The steaming economy and booming consumer spending are triggering a lot of business expansion, leading to greater demand for commercial space, in both office and retail."

While at 17,800 square kilometers, or 6,900 square miles, Kuwait is larger than many Gulf states, the real estate sector is largely concentrated in Kuwait city and its suburbs. Even there, with much of the land owned by the state and its giant petroleum corporations, there is a shortage of space for development. That situation has pushed up prices, as have Kuwaitis' high disposable incomes and the generous housing grants provided by the government.

"High land prices lead to high rentals and a concentration on the luxury end when it comes to offices and other developments," Dash said. The purchase price for the most desirable commercial land hit 5,550 dinars, or $19,300, per square meter in 2005 and the price has shown no signs of falling since.

Tallying all the office towers and retail spaces now under construction, Global Research estimates about 750,000 square meters, or 8 million square feet, of commercial space will arrive on the Kuwaiti market from 2007 to 2009.

The sum includes the country's first round of giant malls, with the Avenues project alone, due to open early next year, adding about 140,000 square meters. A string of hotels also will be opening, including the Messilah Beach, touted as the region's largest. It originally opened in 1974, was severely damaged by the Iraqis and now is being reconstructed by Skidmore, Owings & Merrill of New York and Gulf Consult of Kuwait. A 2007 reopening is planned.

Given the large amounts of commercial space arriving on the market, there already are some concerns about oversupply and reports that office rentals have declined in recent months.

"We calculate that there is around 40 to 50 years of supply coming up in the pipeline in the next year or so, when you look at planning permissions granted," said Ian Gladwin, a chartered surveyor in Kuwait.

"This is way beyond normal and we don't think the Kuwaiti economy is really strong enough to drive this," Gladwin said.


International Herald Tribune

[CrazY]

thanx for the great article skouli

[q8_shaggy_17]

ya thnx 4 the article schooly, but i wanna say somethin that i hate 2 say, it's that there is alot of beaurocracy in kuwait, and kuwait is years behind and the gulf countries are years away from kuwait, y cuz kuwait has been giving money 2 the ppl, raising salaries, and fight happening between senators in parliament and ministers in the government such a waste of time(corupption), while the other gulf countries have been 2 buzy building new projects and making other incomes besides their oil income 4 their economies, i guess we have failed our countries, i hate 2 be desperate but i see beaurocracy almost everyday i feel like its no use, somebody plz cure me

[Foxtrot]

One can’t build a country overnight .. one needs to start. Other GCC countries, Bahrain, Qatar and UAE all started with a vision long ago .. If Kuwait wants to lead, it has to srart soon .. no more time to waste..

[q8_shaggy_17]

exactly foxtrot, but the problem is, they always waste time

[YeMeNi_guy]

Originally Posted by q8_shaggy_17

ya thnx 4 the article schooly, but i wanna say somethin that i hate 2 say, it's that there is alot of beaurocracy in kuwait, and kuwait is years behind and the gulf countries are years away from kuwait, y cuz kuwait has been giving money 2 the ppl, raising salaries, and fight happening between senators in parliament and ministers in the government such a waste of time(corupption), while the other gulf countries have been 2 buzy building new projects and making other incomes besides their oil income 4 their economies, i guess we have failed our countries, i hate 2 be desperate but i see beaurocracy almost everyday i feel like its no use, somebody plz cure me

same with saudi arabia and oman

[Krazy]

Go Kuwait

[q8_shaggy_17]

i agree with u when u say same with saudia and oman, but beleive me q8 is different, if we can only kill the beaurocracy we have and the corruption, i promise u that kuwait will be back like the way it was in the 60s and 70s 3aros el5alej, even better than dubai, but again our problem is corruption, plus kuwait has been through a hole lot, like the iraqi invasion etc.....q8 is back now, and it has 2 get back it's old position as 3aros el5alej, and the buzness bay of the region, and inshalla it will

[Foxtrot]

25 yrs back to The Amer of Dubai came to Kuwait to study this country !! The free trade concept was Kuwaiti idea which UAE adapted..

Dubai studies your country and IMPLEMENTED them .. when Kuwait was sleeping on it ..

Kuwait !! Wake Up !!

[YeMeNi_guy]

come on kuwait isnt that bad