Construction & Real Estate

Kuwait: Real estate rising again

Kuwait's real estate market appears to be moving towards recovery, with falling interest rates and increasing confidence helping to lift sales. There was a marked rise in activity in October, according to a study carried out by Kuwaiti property firm Emaar Alahlia, with transactions up 35 per cent in that month compared to September. The report, issued in late November, said that the lowering of the cost of borrowing had helped drive the increased sales push, and predicted that this trend would continue for the final two months of the year and into 2010. While there had been a drop in prices in some areas in October, the report said this would turn around by the end of the year, with Emaar Alahlia forecasting a climb in housing and commercial property prices by December. Though a pick up is expected by many analysts, it seems that it is only just beginning, with October's gains just about repairing the falls in activity seen in September, when the Ministry of Justice's (MoJ) monthly report on the registration of real estate contracts showed a 40% fall against the August total. The pulse of the overall market is still somewhat thready, with Alshall Consulting and Investment Company predicting that activity in Kuwait's property sector would be down by 40 per cent this year compared to 2008, before rebounding. (OBG)

Development to start on Nakheel's World islands

Development on Nakheel's The World islands, one of the assets the troubled state-linked developer may look to sell amid a debt crunch, is slated to begin within months. Nakheel's parent company, Dubai World has asked creditors for a standstill on US$26 billion in debt, including US$6 billion related to its property units, Nakheel and Limitless. Dubai repaid Nakheel's US$4.1 billion Islamic bond earlier this month after receiving a US$10 billion lifeline from neighboring emirate, Abu Dhabi. The media quoted a Nakheel spokeswoman as saying that about 70 per cent of the 300 islands have been sold on the man-made archipelago shaped like a map of the world.

Construction sector up in Bahrain and Saudi Arabia

Unlike other GCC states, Saudi Arabia and Bahrain posted a growth of 0.5 per cent and 18.3 per cent respectively in the building and construction sector during the third quarter of 2009. On the other hand, this vital sector recorded a decline of 25.4 per cent in the UAE, 9.1 per cent in Kuwait, and 5.6 per cent in Qatar. This information was contained in the recently released report of the Kuwait-based Global Investment House (Global). At the level of construction projects, the total value of the outstanding projects in the Gulf region amounted to US$472.1 billion. The UAE market makes up of the largest share of outstanding projects with78 per cent, and it was followed by Kuwait and Saudi Arabia with 8.7 and 8.3 per cent respectively. The report pointed out that the real estate market in Saudi Arabia, one with a stable outlook, depends primarily on the demand of young Saudis looking for affordable housing. The report predicted that the Kingdom has been experiencing a deficit of up to one million housing units by 2012, and that causes the issuance of new mortgage law to increase the demand for residential real estate.

Singapore's ARA, Qatar's Regency to launch Islamic REIT

ARA Asset Management said it plans to launch a real estate investment trust in Singapore that will comply with sharia, or Islamic, principles. The proposed REIT will hold assets such as hotels and service apartments currently owned by Qatar's Regency Group. DBS is the financial advisor for the proposed REIT.

Bahrain plans US$761 million expo city

A state-of-the-art city for exhibitions and major events will be built near Bahrain International Circuit in Sakhir with an investment of BD287 million (US$761 million), said the Kingdom's Industry and Commerce Minister. 'The facility will be 10 times the size of the existing BIEC and feature three luxury hotels with 1,200 rooms, a multipurpose facility, an event hall and exhibition pavilions,' said Dr Hassan Fakhro on the sidelines of Jewellery Arabia 2009. A private company will be set up to manage and own the massive project. A consortium including Bahrain Exhibitions and Conventions Authority, Bahrain Holding Company, investors and banks will run and co-own the project, he added.

Dubai's Istithmar says lost US hotel in auction

Dubai World's investment arm Istithmar World said it was disappointed it lost its W Hotel in Manhattan in a foreclosure auction in December, and that the loss was unconnected to the restructuring of its parent company's debt. "We are disappointed that the lender has chosen this route as we felt that real progress was being made in negotiations with the various lenders to restructure the debt of W Union Square for the future," a spokesman at Istithmar World said. "This is totally unconnected to the restructuring of the debt of Istithmar parent Dubai World. Istithmar World is not included in that process," he added. Istithmar World lost the hotel for US$2 million, after buying the property for US$282 million in 2006, the Wall Street Journal reported earlier. LEM Mezzanine, a private-equity fund affiliated with real estate investment company Lubert-Adler Partners, won the bid Dubai World on November 30 said Istithmar World was among several of its units that would not be part of its US$26 billion debt restructuring program.

Qatar's property agents rue lack of demand

Some real estate agents in Qatar's capital Doha are lamenting a severe lack of demand for housing, according to a report. According to a recent publication in a Qatari newspaper, the realtors believe that if the situation does not improve, the rental market could take a fresh beating. The business mostly coming the real estate agencies' way at present, is from existing tenants who want to move from higher-rental units to lower ones or those who want to move to places offering more amenities, the daily added. "There are little or no new enquiries for rented housing from people arriving afresh in the country to take up jobs," a real estate agent said. Qatar house prices are poised to ease 15 per cent in 2010 on higher supply, but the construction sector would grow as 40 per cent of the state budget is earmarked for infrastructure, The First Investor Asset Management said in November.