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Year on year decline in property sales in Kuwait prompts expansion abroad

Figures from the National Bank of Kuwait showed that July property sales jumped 50% by value from the previous month.

The report attributed the big increase to the number of residential units sold which grew by 82% while, the number of commercial and investment units sold in the month remained virtually unchanged.

However, the average volume of sales in the sector in the first seven months of 2008 was 25% down on the corresponding period of last year and the number of deals struck in July was 28% lower than in 2007.

It is a trend that is prompting major investors to look outside Kuwait to invest, diversify and expand.

Kuwait's National Real Estate Company is considering moves into markets in Syria and South Africa and is also considering selling Islamic bonds later this year

As well as a $1.3 billion project in Abu Dhabi, it plans to develop a free trade zone in northern Iraq, and is investing about $1.12 billion in Egypt's real estate sector.

'I do not think there are big investment opportunities inside Kuwait. In the coming three to four years, we will enter Syria, Djibouti, Algeria and South Africa,' said chief executive Khaleel Al Abdullah. 'We are in talks with private companies there to buy land,' he added.

Construction for the Abu Dhabi project, which will include a shopping centre, four-star hotel, offices and four residential towers, is to start within three months and is expected to be completed by the end of 2011.

The company is also building two real estate projects in Egypt and is bidding to develop and manage a free-trade-zone project with the government there. 'We are in talks with an Egyptian governmental authority for a new free zone in Suez,' he added.

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