Kuwait Real Estate Market Solution

• Kuwait Real Estate Brokerage

• Feasibility Study

• Business Concept

• The potential business we are looking ahead is setting up of Real Estate Brokerage Firm

• The target market for which is Kuwaiti Nationals specially within rental business

• High net worth Expatriate Individuals and Families

• The Concept Generation

Basis of Business

• At present in the Kuwaiti market there are no specialized services catering to the needs of the young Kuwaiti looking for their first apartment

• Offering to other clients who are:

§ High end expatriate coming to Kuwait

§ All other Kuwaiti professionals

§ Expatriate professionals

• The Concept

• The very basic fundamental for the real estate brokerage business will be provide

• Live in experience to the clients wherein they feel it as one of their owned apartment

• Providing apartments with customized solutions as the need of the customers

• Role of Technology in the business

• Offering real estate services over the internet and telecommunication

• This can achieved by using a variety of search engine tie-ups with international partners in web based real estate services

• The web services will include:

§ Locating residential, investment and commercial properties in the region either it is for sale or rental

§ Requirement being number of bedrooms and rest room

§ Type of building – house, row house, duplex, apartment, special purpose, residential commercial mix

§ Ownership title – freehold, condo/ strata/ timeshare / fractional, leasehold

• Standard Legal real estate contracts

• Connecting with the sellers and buyers interface

• Map wise location search and images of the property to be rented of purchased

• Kuwaiti Market

• Kuwait is a small, rich, relatively open economy with self-reported crude oil reserves of about 104 billion barrels - 8% of world reserves

• Petroleum accounts for nearly half of GDP, 95% of export revenues, and 80% of government income

• Kuwait experienced rapid economic growth over the last several years on the back of high oil prices and in 2008 posted its tenth consecutive budget surplus

• The drop in oil prices in late 2008 has reduced Kuwait's fiscal surplus in 2009. The global financial crisis may slow the pace of investment and development projects, but Kuwait has vowed to use its considerable financial resources to stabilize the economy

• Kuwaiti Market

• Driving this expansion is the growing young local population and a significant influx of expatriates as a result of increased corporate activity

• The sector is also benefiting from the robust economic growth and high per capita disposable income. Ample liquidity has resulted in significant investment in the sector as well

• Changes in laws relating to construction of commercial properties have resulted in a slew of ongoing projects

• Residential township projects worth KD 49.5 billion and infrastructure projects worth KD 11.6 billion are expected to be completed with in next 5 years

• Kuwaiti Market Demographics

Population

• Kuwait Population: 3,441,813

• Kuwaiti National:1,087,000

• Expats 2,354,813

Age Structure:

• 0-14 years: 26.7%

§ Male 340,814

§ Female 328,663

• 15-64 years: 70.5%

§ Male 1,128,231

§ Female 636,967

• 65 years and over: 2.8%

§ Male 44,542

§ Female 26,342

Ethnic groups:

• Kuwaiti 45%, other Arab 35%, South Asian 9%, Iranian 4%, others 7%

• Kuwaiti Market

Marriages

• Marriages occurred of Kuwaiti nationals: 11,395

• Most of the Kuwaiti couples upon their marriage seek new residential location for there future settlement as well

• Expats marriages in the Kuwait are also substantial in number

• Most of the people getting married seek new residential accommodation after marriage

• New marriage are likely to increase every year and the requirement will be increasing too as well

• Kuwait Population Statistics

• Kuwait real estate

• The Kuwaiti government expenditure is likely to propel domestic demand as a whole, which will percolate down to the various economic sectors, and in turn, will contribute to a higher GDP. Taking this in account, we actually observe something very different while analyzing the trend of government expenditure as percentage of nominal GDP.

• The Kuwaiti real Estate Sector comprises of 3 specific segments

§ Residential segment

§ Investment segment

§ Commercial segment

• Government Expenditure as percentage of Nominal GDP

• Kuwait Real Estate Segments

Residential segment

• This segment is comprised primarily of houses, a significant number of which is supposed to be allocated under the national housing scheme. This being preferred form of housing for Kuwaitis, it is the most important segment in terms of the housing requirements of Kuwaiti nationals

Investment Segment

• The investment segment is comprised primarily of land purchases and the construction of residential apartments for rent. The investment segment is important due to Kuwaiti’s significant expatriate population. Since the segment of population cannot, by law, buy properties, all the housing needs of this section of society are fulfilled by the investment property segment. Construction usually takes the form of high rise apartment buildings and differ from the residential segment in that the end user is a tenant and not an owner, the prime investment areas in urban Kuwait are Salmiya, Hawally and Jabariya

• Kuwait Real Estate Segments

Commercial Segment

• It is involved with construction of commercial complexes and sale or rent of spaces in commercial complexes for office and retail establishments, parking space

• Commercial spaces provide yielding high rental rates and property price appreciation. The main commercial areas in Kuwait are Kuwait City, Sharq, Farwaniya, Hawally and parts of Salmiya

• Law governing high rise construction in Kuwait have changed significantly over the years. At present government allowed 100 floor construction

• Size of Kuwait Real Estate Sector

• Stock of Houses

• The growth in residential homes registered with the public authority for civil information grew by a modest 1.8% in June 2007, to 133,832, compared to 131,504 one year before. however, the growth in apartment units was healthy, at 6.9%, reaching 232,668 in June 2007, compared to 217,648 in June 2006. houses and apartments grew at a five-year CAGR of 2% and 5.7%, respectively

• Worth mentioning is the fact that vacancy rates for both houses and apartments decreased marginally, to 16.8% and 36.8%, respectively, in June 2007, compared to 17.9% and 37% in June 2006

• Housing Stock

• Construction Activity

• The total numbers of permits issued decreased by a CAGR of 7.1% between 2001 and 2006

• Housing programs for citizens

• There is a gap between the requests submitted and distributed units has decreased, but it is still quite large. this depicts to us that there is a large number of Kuwaiti’s who will be seeking the real estate services for their houses

• Trend of Price and Demand

• The average value of the sector increased at a five-year CAGR (2002-2007) of 18.6%, with the commercial and investment segments outperforming the sector by growing at 41% and 21.5%, respectively

• Sales in 2007 were due mainly to increased sales of residential properties. Increased sales of residential properties accounted for 78.2% of total incremental sales

• Rental Rates

• Rental rates for residential properties have gone up steadily, from KD1.49 per sq.m in 2001 to KD 2.01 per sq.m in 2006

• Prices have escalated to an all-time high of KD 298 per sq.m in 2006. prices have more than doubled in the last 12 years, from KD 148 per sq.m in 1995 to the current levels

• Upcoming Projects In Kuwait

• Township and housing projects worth KD 49.5 billion are expected to be completed in the near future

• Housing Needs for Kuwaiti

Kuwaiti Clientele Market

• Kuwaiti nationals have specific needs to their first and long term houses these needs varies from different criteria like:

• Locality

§ Kuwaiti nationals prefer to be located in a existing Kuwaiti locality (society) the location of these some well-known sites are Salwa, Rumaithiya, Bayan, Mishref, Faiha, Kaifan etc.

• Access to market

§ People prefer to have their houses close to the market where they can buy their daily necessities items for the family

• Near to office / work place

• Nearness to school for child education

• Nearness to utility services site

• Housing needs for Expats

• Expat customers have needs based on following aspect

• Sufficient space for each member

• Closeness to office/ work space

• Locality nearby where friends are residing

• Close to community gathering and centres

• Nearness to cross cultural access of community

• Circles where children and family member can get to gather and be close to educational institutes

• Availability of parking space

• Privacy for family

• Good neighbourhood

• Access to Medical / Health centres

• The Niche in Real Estate

• Providing of specialized customised needs in the real estate sector

• Offering real estate requirement as per clients need i.e. size of rooms, number of rooms

• Location based requirement of client as sea view, nearness to education / training centre / work location / community

• Furnished and unfurnished apartment

• Short term and long term stay requirements

• Price consideration

• Financial Analysis – Basic Assumptions

• Financial Analysis – Fixed Cost

• Financial Analysis – Revenue Forecast

• Financial Analysis - Expenses

• Profitability

• Our Vision

Our vision is to provide our customers services as to their needs in customised way delivering utmost satisfaction

• Phases

• Phase II

§ Introducing web enabled services for Kuwait Market

• Phase III

§ Entering the other GCC states

§ Along with Web Enabled services

• Phase IV

§ Entering developing economies like India and the Far East, MENA

• Phase II – Introducing Web Services

• Introduction of web enabled services in the Kuwaiti Market

• Providing faster and customised search of requested property in desired location

• The service will provide map based search and type of apartment categories

• Faster access to clients and easy to understand their requirement leading to repeatedly improve services

• Track rent received, tenant information, and leases

• Professional categorized property listing

• Multi-images viewing in the results page

• An option to add to favorites

• Project architecture makes possible per-customer customizations

• Run statistic reports to get some interesting facts about your properties

• Phase III – GCC Market with web

• Setting up a conglomerate with the real estate brokers in the remaining 5 countries

• Setup of offices in the region one by one in planned and phased manner

• Developing a back end web search engine connected with other portals providing refined results

• Dealing with major real estate developers, architects and interior designers who enable to make custom made design for the clients

• Making presence felt by marketing tools and communication media

• Phase IV – Introduction in MENA & Developing Economies

• Entering the MENA region market with the introduction of web services

• In the second stage with phase IV reaching the wide markets in the Asia and Far East region

• These are high potential markets as having ever growing demands for customised services

• The region lacks a professional customized provider, there is sufficient gap and scope for rendering services