Feb 14 2012 |
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Arab Spring - or just high rents? - Real Estate business in Kuwait slowing down
By Ben Garcia, Staff Writer KUWAIT: The real estate business in Kuwait has experienced a drastic slow down at the start of 2012, a real estate broker admits. A female real estate broker, who requested anonymity, explained yesterday that the real estate business is not as promising compared to the same period last year. She related the current situation to the current political situation in the Middle East, the Arab Spring and Iran's nuclear issue. Business owners who rent office space decry the availability of office and commercial space and the lack of vision for renting. According to some renters, building owners continue to keep the prices high even at the expense of leaving a building half-empty.Many commercial buildings in Kuwait City, Farwaniya, Salmiya and as far as Jahra and Fahaheel seem abandoned where 'For Rent' signs could be visible in commercial, residential and apartment buildings. According to one business owner, tenants move from one building to another.
"Just like us; we previously occupied an old building on the corner and now, when a new building opened, we moved. The problem is that the rent is very high as there are plenty of empty buildings," complained M. Hussein, a Deputy CEO of a computer school in Kuwait City. Other factors may play a role too.
Another real estate broker admits that many owners usually post requirements for new tenants. "Not only are tenants very selective nowadays, but even owners select their own tenants," she admitted. "While I am not the right person to speak in regards to politics, the Middle East situation has somehow played a role in the decline of clients," she noted.
Now we could be lucky if we have two. As we end the year 2011 and start 2012, we notice a considerable slowdown in the real estate business," she said. "In fact, up until today we barely have any clients. I think it is the effect of the on-going Arab Spring and Iran nuclear issue," she reiterated.
The National Bank of Kuwait (NBK) 2011 report on real estate in Kuwait saw a 35 percent increase, compared to growth in 2010. NBK posted the total of real estate sales for 2011 at KD 2.7 billion, the report states. But, at the beginning of this year, the trend could change as many real estate establishments are making virtually the same comments. Yet another real estate company confirmed a weak entry into 2012.
"Yes... at our business, it has really been very slow since early January. If it continues, it will be a very bad first quarter report. If I compare today to last year, I think we were far better last year. I do not blame anybody, and I do not think politics are playing a key role here. It could be because rental prices are increasing. Rents are still high so there is no movement by clients. If there are some, it is very little," the broker admitted.
© Kuwait Times 2012
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