Rents in prime commercial properties in Kuwait City have returned to the peak levels, last experienced in 2008 - according to the global property consulting firm CBRE as part of its Q1 2018 Kuwait Market Snapshot. Monthly rates of KD14 per square metre were quoted within the city’s landmark buildings in Q1 2018, marking an increase of 100% on 2012 figures. The report also reveals that occupancy across Grade A commercial office space is at an all-time high at 95 per cent - compared to 60 per cent in 2011. These figures demonstrate an increased demand for good quality office space in the Kuwaiti capital.
The Q1 2018 Market Snapshot also reports that there are an estimated 250,000 square metres of Grade A office stock currently available to rent within the Central Business District of Kuwait City. In researching the paper, CBRE tracked a sample collection of key properties across the capital with a focus on the submarkets of Al Sharq, Al Mirqab, Al Salhiya and Hawalli, to analyse key market trends.
James Lynn, Director of Research & Consultancy, CBRE, commented, “Our research clearly identifies a growing need for high quality office space and the onus is now on developers and landlords of commercial office towers to strive to meet the needs of the modern business community. By diversifying their offerings and providing services as well as innovative workspace solutions, developers and landlords alike can continue to take full advantage of this increased demand and successfully attract new businesses whilst retaining existing valued tenants.”
With a current pipeline supply of almost 200,000 square metres planned for delivery between 2018 and 2021, there will be an 80 per cent increase in available stock across this sector over a short three-year period if all four high-rise developments complete construction on schedule.
Market dynamics do however indicate that with a significant increase in office supply forecast over the short-term combined with marginal expected growth in demand, the local market should begin to see downward pressure on rents as projects begin to complete and vacancy rates steadily rise.