Cambridge Forecast Group Blog

Global Investment House – Kuwait

Kuwait Real Estate Sector – August 2007

Tue, 14 Aug 2007

Dear Investors,

In continuation of Global Investment House coverage of important sectors to Kuwaiti economies, we have come out with the sector report on Kuwait Real Estate, which is one of the few exhaustive coverage on the sector. The report examines the potential of the sector and factors influencing them such as oil prices, population and demography and general economy. The report also includes the performances of the listed companies.

Oil & Gas took the lion’s share of GDP in 2006, comprising 55.0% of total GDP, with contribution of KD16.3bn. The output of this sector grew by 26.4% over that in 2005, which was in line with that in most of the countries in the region, thanks to the skyrocketing oil prices and sustained production levels. Although oil is still the main component of GDP, the non-oil component of GDP has continued its steady rise since 2000. Following up on a growth of 19.9% in 2005, the non-oil sector further grew by 14.2% in 2006, illustrating that there is more to the Kuwaiti economy than oil. All of the sectors within the non-oil economy posted impressive growth during 2006. Among the other non-oil sectors that showed marked improvement were financial institutions (37.0%), transport, storage and communication (13.6%), and construction (9.7%). Community and Social Services, which contributed 11.8% to the GDP grew by 7.8% in 2006.

Real estate and construction segments continued to expand rapidly and additional funds were pumped into these sectors and they become pivotal to the health of the local economy. In growth terms, both construction and real estate were able to improve their value addition to GDP. Construction sector’s contribution to GDP grew by 9.7% during 2006 while real estate contribution grew at 7.2%. Combined, the sectors accounted for 6.0% of Kuwait’s economy during 2006, as compared to 8.5% and 6.7% in 2004 and 2005 respectively. Separately, real estate accounted for 4.4% of GDP, which is below its 6-year period (2000- 06) average of 7.1%. Similarly, construction sector accounted for 1.6% of GDP during 2006, as compared with its 6-year average of 2.3%. However, this does not indicate either real estate or construction activities have been diminishing; instead, this is due to brisk growth in oil & gas sector in Kuwait’s economy.

Global Investment House – Kuwait

research@research.global.com.kw

Kuwait Real Estate Sector – August 2007

Tue, 14 Aug 2007

Going forward, we believe robust economic conditions and increased private spending as well as a strong pick up in gross fixed capital formation, which will be driven by several capital projects to commence, should help the economy to achieve double-digit growth rates in 2007 and 2008. We expect both construction and real estate sectors to continue to augment growth in the non-oil & gas sector. In fact, we feel that growth of those key sectors will especially be quicker in the coming years as the government begins to put into practice its diversification programs and facilitating the role of private sector in the economy.

In order to view the full report, kindly click on the link below:

http://www.globalinv.net/research/Kuwait-Real-Estate-082007.pdf

To view more reports on the Kuwaiti and other markets, please visit our website:

http://www.globalinv.net

Research Unit

Global Investment House

Tel: 965-2400551 Ext: 218

Kuwait Real Estate Sector – August 2007