The complex has a gross leasable area of 65,500 sq metres, and includes a 20,000-sq-metre fresh food market and a 2680-unit car park.
The successful bidder is expected to be announced in the fourth quarter of this year.
New developments in the pipeline
Other projects under development include the 380,900-sq-metre Assima mixed-use project in Kuwait City.
Owned by local firm Salhia Real Estate Company, the project consists of three main sections: the Assima Mall, which will feature 72,000 sq metres of retail space; the 54-storey Assima Tower, with more than 150 offices; and the Assima Residence, a set of 170 high-end apartments to be developed by Mariott.
The shopping mall, of which 62% of the retail space had been leased by late February, is expected to open for business in February 2020. The apartments will follow six months later and the office space in early 2021.
Another addition to the country’s leisure options will be the KD250m ($823.2m) Al Khiran project, being developed by the Tamdeen Group.
Located in Sabah Al Ahmad Sea City in the south of Kuwait, the 116,000-sq-metre project incorporates the country’s largest marina as well as a mall, entertainment facilities, a five-star hotel and commercial office space.
The project will also support the planned development of substantial new residential stock, with homes for some 150,000 people to be constructed in the Sea City area.
Market sales strong despite investment segment fall
The expected entry of new real estate stock comes amid strong performances and growing interest in the sector.
In the fourth quarter of last year real estate sales increased by 91% year-on-year (y-o-y) to KD1bn ($3.3bn), the highest level in four years, according to the National Bank of Kuwait (NBK).
Reflecting this positive trend, quarterly average sales in the sector reached KD849.1m ($2.8bn) last year, far higher than the KD543.6m ($1.8bn) and KD584m ($1.9bn) recorded in the previous two years, respectively.
This momentum appears to have carried over into the beginning of this year. Although first quarter sales moderated from the previous period’s result, they still recorded y-o-y growth of 2.8% to total KD789m ($2.6bn).
However, while y-o-y growth in the commercial and residential segments was strong in the first quarter, at 46.4% and 26.2%, respectively, the market suffered from a 30.5% y-o-y reduction in the investment segment, which consists of apartments and apartment buildings.
The NBK said that the slower demand was likely due to a decline in immigration, along with the increasing amount of supply set to enter the market. There is a possibility that going forward it could drive down apartment prices and put a strain on the market, given the major projects in the pipeline.
Real estate to boost broader economic plan
The development of real estate projects with a strong focus on entertainment and leisure is a key aspect of the government’s overarching economic strategy.
The flagship Northern Gulf Gateway development project, unveiled in March last year, aims to add $220bn to Kuwait’s GDP by 2035 through the development of the non-oil sector. Officials pointed to the tourism, hospitality and leisure sectors, among others, as having significant growth potential.
© Oxford Business Group 2019