2012 Global Market report - NAI Global

Kuwait City, Kuwait
Luxembourg City, Luxembourg
Contact
NAI Kuwait
+1 965 22437717
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
6,880
4.4%
$127.80
$34,743.37
3.6%
1.6%
6.2%
3.678
Kuwait is a small but wealthy and open economy, with
approximately 102 billion barrels of crude-oil reserves which
is roughly 9.5% of the world’s reserves. Kuwait is embarking
on the ambitious $125 billion, four year plan which aims to
boost Kuwait’s non-oil income fourfold. Global economic
recovery and stability in oil prices will keep Kuwait’s
economy on good footing for the next several years.
The real estate sector in Kuwait has been on the path of
recovery from the global financial turndown, coupled with
the discontinuation of laws which restricted trading and
financing in residential projects. The demand for residential
properties is high, both from the native Kuwaiti population
for private residential real estate and from expatriates for
rented residential apartments. However, the supply has not
kept up with surging demand, pushing prices upward.
Demand in the residential sector is booming with a waiting
list in excess of 90,000 units under a guaranteed housing
project by the government. Favorable demographics are the
prime factor putting upward pressure on demand.
The 1.1 million strong Kuwaiti population will continue to
grow by an average 3% over the next three years. The
expatriate population growth had slowed down during the
recession years with occupancy rates for rented apartments
at around 90% to 95%, but the rental rates in the country
remained fairly stable over the past year. The influx of
expatriates is expected to resume with the upswing in oil
exports and increasing investment activities, and rental rates
could move up in the near to medium term.
The commercial real estate segment on the other hand is
witnessing oversupply. Vacancy rates in commercial office
towers in the city skyrocketed during recession years, and
currently average about 25%. In addition to the already
existing 1.2 million SM in Kuwait City, 0.5 million SM of
capacity is set to hit the market in 2012. If proportional
increase in demand is not forthcoming, further softening of
prices could be seen in the near term.
To support the struggling commercial sector, the government
of Kuwait through its investment arm, Kuwait Investment
Authority (KIA), announced that it will invest $3.6 billion in
the local commercial property sector. Kuwait Real Estate
Clearing Company was formed in 2010 to improve
the transparency of transactions, real estate prices and
efficiency of the market.
Contact
NAI Belux
+352 621 268 977
Country Data
Area (Sq Mi)
GDP Growth
GDP 2011 (US$ B)
GDP/Capita (US$)
Inflation Rate
Unemployment Rate
Interest Rate
Population (Millions)
998
3.1%
$55.19
$108,226.61
1.9%
5.6%
1.0%
0.51
Luxembourg offers a strategic position at the heart of Europe
and is the world’s second largest home for asset management,
only behind the US. Its political system consists of a
parliamentary democracy under the form of a constitutional
monarchy. Recently, the country confirmed its commitment
toward R&D and innovation. Luxembourg is an international
country welcoming foreign people, offering a high quality of
living and a tailor-made international school system.
Sustained market activity with take-up of 48,634 SM during
Q2 in 73 deals, brought the total to 75,334 SM for H1. The
recovery was confirmed in Q2 2011 with take-up increasing
by 59% over the same period last year; this reflects a return
to pre-boom levels. This strong take-up combined with a
moderate speculative completion (9,700 SM) led to a further
decrease of the vacancy rate from 6.6% in Q1 to 6.3% in Q2.
The development pipeline for 2011 is very low, amounting
to 52.000 SM. The speculative pipeline foreseen for 2012
is estimated at 37.600 SM of which the largest part will be
in the periphery (18,000 SM and four buildings) followed by
the station (14,500 SM for the Central Plaza) and the CBD
(3,300 SM remaining speculative of the 488 building). The
lack of new supply entering the market in the course of
2011 and 2012 is likely to drive the vacancy rate down
further. Looking ahead in 2013, speculative development
remains low with only 49,000 SM to be delivered.
Downward pressure on rental levels is not prevalent either
in town or in the periphery markets. While rents, especially
in the periphery, were in steady decline since the beginning
of the crisis, it seems that a slight increase for the prime
locations has begun with the rest of the country enjoying a
stable market. Prime rents in the CBD are around EUR
40/SM/month excluding VAT.
Investment volume reached EUR 85 million during Q2 2011,
taking the total of H1 EUR 105 million; no transactions by
institutional investors. The volume of investment is a marked
improvement against last year; however it still remains low
due to the lack of products that meet the criteria sought by
prospective buyers. In the meantime, prime yields (6/9 year
leases) remained stable in Luxembourg at 5.5% to 6%.
Kuwait At A Glance
conversion 0.28 kWd = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction (AAA)
Class A (Prime)
Class B (Secondary)
IndustrIal
Bulk Warehouse
Manufacturing
High Tech/R&D
retaIl
Downtown
Neighborhood Service Centers
Community Power Center (Big Box)
Regional Shopping Centres/Malls
Solus Food Stores
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 20.00%
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 10.00%
KWD 5.00 KWD 7.00 $ 19.91 $ 27.87 2.00%
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 5.00%
KWD 6.00 KWD 8.00 $ 23.89 $ 31.85 5.00%
KWD 5.00 KWD 7.00 $ 19.91 $ 27.87 1.00%
KWD 2.50 KWD 4.00 $ 9.95 $ 15.93 5.00%
KWD 3.00 KWD 5.00 $ 11.94 $ 19.91 3.00%
N/A N/A N/A N/A N/A
KWD 18.00 KWD 30.00 $ 71.67 $ 119.45 2.00%
KWD 8.00 KWD 20.00 $ 31.85 $ 79.63 1.00%
KWD20.00 KWD 28.00 $ 79.63 $ 111.48 2.00%
KWD 20.00 KWD 35.00 $ 79.63 $ 139.35 2.00%
KWD 8.00 KWD 20.00 $ 31.85 $ 79.63 1.00%
deVeloPment land low/m 2 High/m 2 low/acre High/acre
Office in CBD
KWD 3,500.00 KWD 6,500.00 $ 50,585,783.37 $ 93,945,026.26
Land in Office Parks
N/A N/A N/A N/A
Land in Industrial Parks
KWD 185.00 KWD 1,150.00 $ 2,673,819.98 $ 16,621,043.11
Office/Industrial Land - Non-park
N/A N/A N/A N/A
Retail/Commercial Land
KWD 3,000.00 KWD 5,500.00 $ 43,359,242.89 $ 79,491,945.30
Residential
KWD 250.00 KWD 1,000.00 $ 3,613,270.24 $ 14,453,080.96
Luxembourg At A Glance
conversion 0.72 eur = 1 us$ RENT/M 2 /MO US$ RENT/SF/YR
low High low High Vacancy
cItY center offIce
New Construction
Class A (Prime)
Class B (Secondary)
suburban offIce
New Construction
Class A (Prime)
Class B (Secondary)
IndustrIal
EUR
EUR
EUR
EUR
EUR
EUR
31.00
35.00
22.00
24.00
26.00
16.00
EUR
EUR
EUR
EUR
EUR
EUR
40.00
40.00
31.00
28.00
28.00
24.00
$
$
$
$
$
$
48.00
54.19
34.06
37.16
40.26
24.77
$ 61.93
$ 61.93
$ 48.00
$ 43.35
$ 43.35
$ 37.16
6.30%
N/A
N/A
N/A
N/A
N/A
Bulk Warehouse
Manufacturing
EUR
EUR
3.30
2.50
EUR
EUR
5.00
5.80
$
$
5.11
3.87
$
$
7.74
8.98
N/A
N/A
High Tech/R&D
retaIl
EUR 4.20 EUR 6.70 $ 6.50 $ 10.37 N/A
City Center
EUR 40.00 EUR 100.00 $ 61.93 $ 154.84 N/A
Neighborhood Service Centers
Community Power Center (Big Box)
EUR
EUR
8.00
8.00
EUR
EUR
10.00
10.00
$
$
12.39
12.39
$ 15.48
$ 15.48
N/A
N/A
Regional Shopping Centers/Malls
Solus Food Stores
EUR 40.00
N/A
EUR 100.00
N/A
$ 61.93
N/A
$ 154.84
N/A
N/A
N/A
deVeloPment land low/Hectare High/Hectare low/acre High/acre
Office in CBD
Land in Office Parks
Land in Industrial Parks
Office/Industrial Land - Non-park
Retail/Commercial Land
Residential
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
N/A N/A N/A N/A
2012 Global Market Report n www.naiglobal.com 55