kfh.com 180 3333 KFH Local Real Estate 3 Report Third Quarter 2014 KFH Local Real Estate 3 Report Third Quarter 2014 Kuwait KFH Local Real Estate Report 2014

Introduction Development of the total value of real estate trading monthly starting 2011 to September 2014 Laws are just as good as the institutions that enforce them. Courts do not enforce law KD Million and resolve disputes only. Their interpretations of laws also fill many of the inevitable 700 loopholes in legislations. This may also apply to the current debate on Law No 8 for 600 2008, under which KFH received a court sentence from the Court of Cassation stating 500

that Islamic banks shall not be subject to the provisions of law that ban banks from 400

conducting this business. This has the greatest effect on disseminating a climate 300 of revitalized real estate housing market, after the recess it underwent due to these 200 laws, not to mention global financial crisis. 100

However, this law was interpreted in a unique way. That is, a charge should be im- 0 July July July July May May May May April April April April June June June June March March March March

posed for properties with an area over 5,000 m2, according to Law No 8 of 2008 on August August August August October October October February February February February December December December November November November the exploitation of vacant lands, stipulating that if the area of an unbuilt private res- September September September September January 2011 January 2012 January 2013 January 2014 January

idence plot exceeds five thousand square meters, and this plot is owned by a natural Agencies Contracts person in any site or project including plots allocated for private residence, whether these plots are all in the same or different places, a KD 10 tax shall be imposed for each square meter over this area. In addition, the law states that a plot may not be exempted from this tax unless 200 m2 or 20% of its area, which is bigger, is built. This tax shall be payable from one year from the issue date of the law. It shall be payable, regardless of whether the owner is an individual or an organization. This leads to the delay in enforcing the law and the recourse to court in search of an equitable interpretation. To protect the interests of KFH’s depositors, shareholders and customers, KFH decid- ed to pay the charges imposed on KFH under Law No 8 so that KFH’s customers may finalize their suspended transactions with the Ministry of Justice, although there are claims still unsettled. Regarding these claims, KFH is waiting for the opinion of the impartial Kuwaiti judiciary, which may mean that KFH could recover these paid charges in whole or in part, if it was decided that KFH is not subject to these charges.

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Such a decision will reactivate the private residence segment of the real estate financing market, through feed- Average price per square meter in Governorate declined to KD 2,855, while reaching over KD 2,500 in ing in new customers. It will also increase the confidence of the public and customers in the mechanism applied Farwaniya and KD 3,050 in Ahmadi in Q3 2014. in KFH’s real estate financing agreements, after overcoming this problem. It will also secure customer equities, through taking the required actions to register customer-owned properties with the Ministry of Justice. This decision is in line with the rising interest in solving the housing problem in Kuwait by economic policy Market Trends makers and the National Assembly. This will be achieved through speeding land allocation, shortening wait- Trading indicators issued by the Ministry of Justice’s Department of Registration and Authentication with re- ing periods, increasing the volume of support directed to building materials to relieve the citizens from price spect to the total real estate transactions have recorded around KD 952.979 million in Q3 2014, remarkably increases caused by shortage of supply. It will also be achieved through a reconsideration of a number of real declining by 33% of about KD 479.5 million from their KD 1.432 million in Q2 2014. estate legislations to accommodate the private sector and extend its participation in construction and real es- tate development, which will contribute to a speedy solution of the housing problem. Progress of the total value of Real Estate transactions The sales of the real estate buildings in Kuwait recorded a decrease for the first time after a series of increases from Q3 of 2013 until Q3 of 2014 in two years, reaching its least value since Q2 2013. This remarkable decrease was driven by a decrease in real estate residential, investment and commercial transactions, with a slight increase in price indicators, whose KD Million change ratios varied across different areas. Commercial real estate properties also witnessed a slight rise in the 1,600 shadow of the continued improvement in occupancy rates in commercial buildings in the areas of Farwaniya, 1,400 1,200 Fahaheel and the metropolitan district. 1,000 The total value of real estate transactions in Q3 2014 has witnessed a remarkable decrease that reached 33%, 800 representing more than KD 479 million, with the total value of real estate transactions reaching about KD 953 600 400 in Q3 2014, compared to about KD 1.4 billion in Q2 2014. 200 0 Real estate transactions for private residence have contributed by 43% of the total value of real estate trans- Q3 Q4 Q1 Q2 Q3 actions during Q3 2014, compared to a share of 42% in Q2 the year 2014, while Q3 has witnessed a rise in the 2013 2013 2014 2014 2014 share of investment transactions to about 50% compared to about 44% in Q2 2014, while commercial transac- Agencies Contracts tions declined to about 4% compared to 13%. At the same time, crafts and showrooms real estate transactions recorded a relative increase, contributing by 3% in Q3, compared to less than 1% of the total value of real estate transactions in Q2 2014, while coastline transactions recorded a share of only 1% in Q3 2014. The total real estate contract transactions reached about KD 920 million in Q3 2014, recording a remarkable decline by 32% (KD 427 million) than KD 1.347 billion in Q2 2014. Meanwhile, the total real estate agency trans- The volume of real estate trading activity had a significant impact on private housing, driving a declining trend actions declined to KD 33 million in Q3 2014, leading to a decrease of over 61% of about KD 52 million from in the total value of real estate transactions, given that the volume of trading of the residential properties has their Q2 2014 value of about KD 86 million. witnessed a decrease by 31% of about KD 104 million from their Q2 2014 value. On a year-to-year basis, the total real estate contract transactions recorded a limited decrease of 7% (KD 66 Investment property transactions recorded a remarkable decline of 23% of about KD 143 million than Q2 2014, million), than their previous KD 986 value in Q3 2013, while the value of the total trading of real estate agency while commercial property transactions recorded an unprecedented decline of 82% (over KD 99 million) in Q3 transactions recorded a remarkable YTY decrease of 46% of about KD 29 million, compared to their value of compared to Q2 2014. about KD 62 million recorded in Q3 of 2013. As regards coastline transactions, these recorded the second activity during the year, recording about KD 5 Real estate transactions by Sector as a percentage of the total Real Estate million compared to their inactivity in Q2 2014. transactions during Q3 of 2014 Meanwhile, storage and occupational property transactions were active in Q3 2014 thus recording a remarkable increase of 15% (over KD 3 million) than Q2 2014 recorded values.

Regarding prices, the indicators of the residential property prices recorded a slight increase of less than 1% Private 43% during Q3 2014 in all governorates of Kuwait, compared to average prices recorded in Q2 2014. The price indi- Investment 50% cators of the investment housing have recorded a slight increase of about 2% to average prices in Q2 2014, as an average of the Governorates of Kuwait. Commercial 4% Concerning commercial properties, price indicators witnessed a slight increase of less than 1% during Q3 2014 Industrial - Warehouses 3% for average price across Kuwaiti governorates, compared to a limited increase of 1% in Q2 2014. Average price per square meter in the Capital Governorate stabilized at KD 5,948 in Q2 & Q3 2014.

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Value of Real Estate transactions for every sector during Q2 and Q3 of 2014

KD Million

700

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400

300

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100

0 Residential Investment Commercial Warehouse Coastal

Second Quarter 2014 Third Quarter 2014

The average value of total transactions has recorded about KD 471,000 during Q3 2014, declining at a rate of 27% of about KD 174 Million, compared to its KD 646,000 value in Q2 2014. It recorded yearly increase of 7% than the average of total transaction value in Q3 2013.

Progress average value of the total Real Estate transactions from Q3 2012 - Q3 2014

KD Thousand

800 700 600 500 400 300 200 100 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2012 2013 2013 2013 2013 2014 2014 2014

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Trends in Private Housing Private residence transactions declined in Q3 2014, constituting 43% of the total real estate transactions, due Progress average transaction value out of the total housing real estate transactions to a remarkable decrease in their value compared to the previous quarter. They have already contributed to a from Q3 2012 – Q3 2014 share of 42% of the total real estate transactions in Q2 2014. KD Thousand 450 Progress of the investment properties value transactions from Q3 2012 – Q3 2014 400

KD Million 350 300 700 250 600 200 500 150 100 400 50 300 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 200 2012 2012 2013 2013 2013 2013 2014 2014 2014 100

0 Q3 Q4 Q1 Q2 Q3 With regard to the value of the monthly transactions for the private housing during Q3 2014, September 2014 2013 2013 2014 2014 2014 recorded the highest share of trading during Q3 with 39% (of about KD 16.2 million) of the total private trading

Agencies Contracts transactions, followed by July with about KD 135.4 million (33%), while August ranked last with about KD 177 million (28%) of the private housing transactions in Q3 2014.

The private housing transactions recorded about KD 415 million in Q3 2014, compared to their value that re- corded about KD 600 million in Q2 2014, with a remarkable decrease of about KD 185.6 million, at a noticeable rate of 31%. The number of private housing transactions declined to about 1,620 during Q3 2014, compared to 1,651 trans- actions in Q2 of 2013, with a limited decrease of 1.5% (31 transactions). This led to a decline in the average value per transaction in Q3 2014 to about KD 256 thousand with a drop of 30% (KD 108 thousand), compared to about KD 364 thousand in Q2 2014.

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Trends of Investment Properties

In Q3 2014, investment property transactions declined for the first time since Q2 2014, recording about KD 474 Progress average transaction value out of the total housing real estate transactions million to reflect a remarkable decline of about KD 143 million (23%), compared to their value of KD 617 million from Q3 2012 – Q3 2014 in Q2 2014. KD Thousand Despite the decline in value, there was an improvement in their share in the total value of the transactions in Q3, 1,200 compared to their Q2 2014 value. They contributed to 50%, compared to 43% in Q2 2014. 1,000 On an annual basis, investment transactions rose by a remarkable percentage of 25% (over KD 94.5 million), compared to their value in Q3 of 2013. 800 600

Progress of transaction value of private housing from Q3 2013 – Q3 2014 400 KD Million 200 700 0 600 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2012 2012 2013 2013 2013 2013 2014 2014 2014 500

400

300

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0 Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014

Agencies Contracts

The decline in value of investment property transactions was accompanied by a remarkable decline in their number in Q3 2014 (360), recording a decrease of 30% (152) from their number in Q2 (512). The value of the investment properties transactions recorded about KD 1.3 million in Q3, in a remarkable rise of 9% of about KD 112 thousand, from their Q2 value of about KD 1.2 million. On an annual basis, the average value of investment property transaction in Q3 has been doubled, recording an increase of about KD 436 thousand (50%), compared to their Q2 value of about KD 881 thousand. As regards the monthly volume of the investment transactions in Q3 2014, September witnessed around half of these transactions, recording (44.5% of about KD 210.8 million) of the total investment transactions, followed by July (28.4% of about KD 134.7 million) and then August (27% of about KD 128.7 million).

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Commercial Property Trends In Q3 2014, commercial property transactions witnessed a remarkable decline, recording about KD 34 million, Progress of the average value of commercial property transactions compared to an unprecedented value of about KD 193.4 million in Q2 2014. Commercial property transactions Q3 2012 – Q3 2014 in Q3 2014 declined by 82% (over KD 159 million), which contributed to the decline in their share in the total property transactions 4% in Q3 compared to 14% in Q2 2014. KD Thousand 8,000 On an annual basis, the value of commercial property transactions recorded a remarkable decline in Q3 of 2014, 7,000 reaching 74% (over KD 99 million), compared to their Q3 of 2014 value of about KD 133.3 million. 6,000 5,000 Progress of the values of commercial property transaction from Q3 2013 – Q3 2014 4,000

KD Million 3,000 2,000 250 1,000 200 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2012 2012 2013 2013 2013 2013 2014 2014 150

100 Regarding the volume of the monthly trading transactions in Q3 2014, September ranked first with 50% of all 50 commercial property transactions (of about KD 17 million), while August came in the second rank (of about 40% of about KD 13.9 million) and July in the third rank (of 10% KD 3.4 million). 0 Q3 Q4 Q1 Q2 Q3 2013 2013 2014 2014 2014

Agencies Contracts

Twenty commercial property transactions were concluded in Q3 of 2014, in a remarkable decrease of 62.5% (12 transactions), compared to their number in Q2 of 2014 which recorded 32 transactions. In Q3, the value of the commercial property transactions recorded KD 2.8 million on average, with a remarkable decrease of 53% of about KD 3.2 million, compared to an average of KD 6 million in Q2 2014.

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Price Index First: Private Housing Land Prices The State aims to accomplish more than 36 thousand housing units by 2017, while the number of accumulated List of Projects for Houses, Plots, Services, and Affiliated Public Buildings carried out by PAHW residential applications has increased to about 111.7 thousand since 1985 based on the latest report issued on September 2014 9th of July 2014. Since the beginning of the year until July 2014, submitted applications reached about 4,293 Actual Rate of Completion applications. According to July 2014 statistics, existing housing applications reached about 8,487 applications # Area Contract Value submitted to the Public Authority for Housing Welfare (PAHW) in 2013 alone. This requires more efforts to pro- Q3 2014 Q2 2014 vide this number of housing units, so that the lack in supply may not push prices higher. 1 Sabah Al Ahmad City 132.9 93% 89.7% During Q3 2014, PAHW managed to allocate around 1,380 housing unit in Sabah Al Ahmed, Abdullah Al Mubarak 2 Sabah Al Ahmad City 127.9 81% 74.6% West and . PAHW plans to allocate over 3,110 units in Q4 2014 and over 5,000 units in Q1 2015. This 3 Sabah Al Ahmad City 200.7 80.5% 75.4% will alleviate the problem. Housing projects under construction are estimated by over 20.3 thousand residential 4 Northwest Sulaibkhat City 34.3 59% 46.1% units in several cities such as the city of Sabah Al Ahmad, Jaber Al-Ahmad City, project of northwest Sulaibkhat, 5 Sabah Al Ahmad City 18.9 62% 56% the plots of Al Naseem, the existing projects of Khiran and Wafra. 6 Northwest Sulaibkhat City 38.1 54% 43.6% New project, time Progress of the number of residential applications submitted PAHW 7 Jaber Al Ahmed City 58.4 2% schedule commenced 2000 - July 2014 8 Al Wafrah Housing Extensions 28.5 New project, time schedule being set Demand Cost KD 639.8 M 10,000 %40 9,000 %30 List of projects for public buildings carried out by PAHW - September 2014 8,000 %20 7,000 %10 Actual Rate of Completion 6,000 %0 # Area Contract Value Q3 2014 Q2 2014 5,000 %10- 4,000 %20- 8 Sabah Al Ahmad City 34 51% 44% 3,000 %30- 9 Sabah Al Ahmad City 38.5 38% 34% 2,000 %40- 11 Sabah Al Ahmad City 6.2 33% 30.4% 1,000 %50- 12 Jaber Al Ahmad City 57.3 35% 20.6% 0 %60- 13 Sabah Al Ahmad City 44.7 18.7% 11.4% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 14 Naseem Housing Project 9 14.6% 3.4% 15 Sabah Al Ahmad City 36.4 3.7% 1.4% Volume of applications Change rate in size of applications - right Existing Wafrah Project 21.1 PAHW has opted to implement an ambitious plan during the period extending from 2011 until 2014, which was Cost KD 247.5M approved by the National Assembly, in order to introduce some of the giant companies in various economic sectors and pump new investments in the Kuwaiti economy. These projects include the construction of homes, plots, services, public buildings and facilities, and the corresponding requirements of such projects. This in- cludes roads and establishment of service and main buildings. Some of these projects were handed over during the last year. In Q3 2014, various major road and service projects planned to be established in the city of Qair- ouan were completed and delivered. The rate of actual achievement in some of these projects has reached more than 90% of the projects scheduled for completion, according to information released by the Public Authority for Housing Welfare (PAHW). New projects were introduced. These include Qairouan project, the infrastructure, road and main stop nonstruction and maintenance work in Al Wafrah and completion and maintenance of pub- lic buildings in Al Wafrah in this Q3 2014.

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List of projects for Roads & Main Services carried out by the Public Authority for Housing Welfare Residential Plot Prices in the Capital Governorate (PAHW) - September 2014 Market Value per Average Price % of Market Value of Land (KD) Actual Rate of Completion Region Area Site Square Meter (KD) per M² during # Area Contract Value Building Q3 2014 Q2 2014 From To From To Q3 2014 16 Sabah Al Ahmad City 13.2 100% 98% 500 210% Internal 800,000 900,000 1,600 1,800 1700 Al Shuwaikh 1000 210% Internal 1,500,000 1,750,000 1,500 1,750 1625 17 Sabah Al Ahmad City 6.6 59% 55.5% Residential A new project & the 1000 210% Main 1,750,000 1,900,000 1,700 1,900 1825 18 Saad Al Abdallah 1 27.9% schedule is in process General Average in the Area 1,512,500 1,675,000 1,712.5 1,900 1,806 A new project & the 19 Jaber Al Ahmad City 1.9 35.5% 500 210% Internal 675,000 800,000 1,350.0 1,600 1,475 schedule is in process Abdullah Al 750 210% Internal 950,000 1,180,000 1,266.7 1,573 1,420 A new project & the Salem Area 20 Jaber Al Ahmad City 1.09 5% 1000 210% Internal 1,200,000 1,400,000 1,200.0 1,400 1,300 schedule is in process General Average in the Area 1,187,500 1,380,000 1,413.9 1,651 1,532 21 Qairawan Area 79.3 A new project & the schedule is in process 250 320% Internal 280,000 340,000 1,120 1360 1240 Cost KD 22.4 M Al Shamiyah 500 210% Internal 580,000 650,000 1,160 1300 1230 Total Cost of PAHW Projects KD 911.3 M 750 210% Internal 770,000 940,000 1,026.7 1,253 1,140 Source: List of Projects of the Public Authority for Housing Welfare (PAHW) – September 2014 (www.housing.gov.kw) General Average in the Area 771,429 897,143 1,142.4 1,330 1,232 Regarding price movement in the governorates, average residential plot prices in the Capital Governorate stabi- 500 210% Internal 550,000 600,000 1,100.0 1,200.0 1,150 lized in Q3, compared to a slight increase at less than 1% in Q2. 500 210% Main 580,000 700,000 1,160.0 1,400.0 1,280 Al Nozha 750 210% Internal 790,000 940,000 1,053.3 1,253.3 1,153 Average price per square meter in the Capital Governorate stabilized at about KD 1,074 in Q3 2014, because of price stability in most areas of the governorate. Prices stabilized in many areas in the governorate, including 750 210% Main 850,000 1,075.000 1,133.3 1,433.3 1,283 Shuwaikh Residential and Abdullah Al-Salem areas, around KD 1,803 and KD 1,533 respectively. Both districts General Average in the Area 804,000 938,000 1,139.3 1,332.3 1,235 recorded the highest average price per square meter in the Capital, while average prices slightly declined in 750 210% Internal 750,000 880,000 1,000.0 1,173.3 1,086 Al Shamiyah, Al Nozha, Al Khaldiya and Kifan. Prices stabilized in Odaylyah, Faihaa and Al Rowda Al Dasma, 750 210% Main 825,000 975,000 1,100.0 1,300.0 1,200 Al Khaldiya declining in Granada by less than half percent, to stabilize on Al Doha and Sulaibikhat at an average of KD 652 1,000 210% Internal 950,000 1,150.000 950.0 1,150.0 1,025 and KD 643 in Q3. 1,000 210% Main 1,100.000 1,300.000 1,100.0 1,300.0 1,200 Average Price per Square Meter for Private Residence in Capital Governorate General Average in the Area 906,250 1,076,250 1,037.5 1,230.8 1,134 during Q2 & Q3 of 2014 500 210% Internal 525,000 600,000 1,050.0 1,200.0 1,125 KD 500 210% Main 600,000 680,000 1,200.0 1,360.0 1,280 Aladailiya 2,000 750 210% Internal 725,000 865,000 966.7 1,153.3 1,060 1,800 Q2 2014 Q3 2014 1,600 750 210% Main 825,000 940,000 1,100.0 1,253.3 1,176 1,400 General Average in the Area 884,375 1,010,625 1,089.6 1,245.8 1,167 1,200 1,000 Average price per meter in Hawalli Governorate stabilized at about KD 1.015 in Q3, compared to about KD 1,014 800 in Q2 in which witness a slight rise of 1%. 600 400 The areas of Al Bida’a, Al Shaab, and West still record the highest price value in the governorate, as pric- 200 es stabilized in Al Bida’a and Al Shaab areas, while they were subject to a slight increase in West Mishref by 1.2 0 %. Prices also slightly increased in As-Siddiq, Al Salam, Hetteen, Al Shuhada’a, and Al Zahra’a. They stabilized in Bayan and Al Jabryah in Q3, while declining in Rumaithiya and Salwa by less than 1%. Doha Surra Faiha Daiya Keifan Nuzha Dasma Rawdha Qadsiya Adailiya Granada Al Salem Khaldiya Shamiya Yarmouk Abdullah Qourtuba Shuwaikh Residential Sulaibikhat Mansouriya

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Average price per square meter for Private Residence in Hawally Governorate However, average price per meter in Al Farwaniya Governorate recorded about KD 702 with a slight increase of during Q2 & Q3 of 2014 1% in Q3, compared to about KD 695 in Q2 when they recorded an increase by 2.2%. Ashbilya witnessed a slight increase of about KD 844 for average price per meter, which is the highest price in KD the governorate, while prices stabilized in most of the areas in the governorate compared to Q2 of 2014, such as 1,800 Q2 2014 Q3 2014 Al Rabia, Al Farwaniya, Al Firdaws and Jleeb Al Shuyoukh, while increasing slightly in Khaitan. 1,600 1,400 In a contradiction of the overall trend, Al Omariya recorded a remarkable increase of 17.3 %, while Al Omariya 1,200 area witnessed a remarkable increase of 13%, wherease the area of Sabah Al Nasser witnessed a slight decrease 1,000 of 11% in Q3. 800 600 400 Average price per square meter for Private Residence in Farwaniya Governorate 200 during Q2 & Q3 of 2014 0 Al Bida’a Al Shaab West Al Siddiq Al Salam Hetten Al Shuh- Al Zahra Bayan Al Al Rum- Mishref Salwa Mishref ada’a aithiya KD Q2 2014 Q3 2014 900 800 Prices of Residential Plots of Land in Hawalli Governorate 700 Market Value per Average Price 600 % of Market Value of Land (KD) Region Area Site Square Meter (KD) per M² during 500 Building From To From To Q3 2014 400 300 210% 400 Internal 420,000 460,000 1,050 1,150 1,100 200 Al Shaab 210% 400 Main 450,000 500,000 1,125 1,250 1,188 100 210% 500 Internal 480,000 550,000 960 1,100 1,030 0 Ishbiliya Al Rabiyah Al Farw- Al Firdous Jeleeb Al Rihab Khitan Sabah Al Andalus Al Oma- Al Ardhiyah General Average in the Area 540,833 598,333 1,002 1,112 1,057 aniya Al Shuyoukh Al Naser riyah 210% 400 Internal 380,000 425,000 950 1,062 1,006 Al Jabriya 210% 400 Main 400,000 460,000 1,000 1,150 1,075 General Average in the Area 540,000 608,333 844 957 901 210% 400 Internal 350,000 390,000 875 975 925 Al Rumaithiya 210% 400 Main 370,000 450,000 925 1,125 1,025 210% 500 Internal 385,000 450,000 770 900 835 General Average in the Area 539,444 622,222 818 950 884 210% 500 Internal 360,000 390,000 720 780 750 Salwa 210% 500 Main 410,000 450,000 820 900 860 General Average in the Area 644,286 712,857 805 891 848 210% 400 Internal 390,000 430,000 975 1,075 1,025 Al Salam 210% 400 Main 430,000 460,000 1,075 1,150 1,113 General Average in the Area 435,000 480,000 973 1,071 1,022 210% 400 Internal 390,000 430,000 975 1,075 1,025 Hetteen 210% 400 Main 430,000 460,000 1,075 1,150 1,113 General Average in the Area 435,000 480,000 973 1,071 1,022 210% 400 Main 390,000 430,000 975 1,075 1,025 Al Shuhada’a 210% 500 Internal 430,000 460,000 1,075 1,150 1,113 General Average in the Area 435,000 480,000 973 1,071 1,022

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Prices of Residential Plots of Land in Al Farwaniya Governorate Prices of Residential Plots of Land in Al

Market Value per Average Price Market Value per Average Price % of Market Value of Land (KD) % of Market Value of Land (KD) Region Area Site Square Meter (KD) per M² in Q3 Region Area Site M² in (KD) per M² during Building Building From To From To 2014 From To From To Q3 2014 210% 500 Internal 290,000 330,000 580 660 620 Al Andalus 210% 1000 Internal 430,000 470,000 430 470 450 210% 500 Main 320,000 360,000 640 720 680 Al Fintas Agricultural 210% 1000 Main 480,000 520,000 480 520 500 General Average in the Area 386,000 444,000 596 684 640 210% 750 Internal 310,000 360,000 413 480 447 210% 500 Internal 280,000 325,000 700 813 756 Hadiya Al Rabia 210% 750 Main 380,000 420,000 507 560 533 (Existing House) 210% 500 Main 330,000 370,000 825 925 875 210% 400 Internal 280,000 320,000 700 800 750 General Average in the Area 305,000 347,500 763 869 816 210% 400 Main 310,000 350,000 775 875 825 210% 400 Internal 330,000 350,000 825 875 850 Al Aqila Ashbilya 210% 500 Internal 300,000 350,000 600 700 650 210% 400 Main 340,000 380,000 850 950 900 210% 500 Main 350,000 400,000 700 800 750 General Average in the Area 340,000 374,167 804 884 844 Coastline C overlooking 150% 750 Main 1,100,000 1,150,000 1,467 1,533 1,500 210% 500 Internal 350,000 380,000 700 760 730 the Sea Al Farwaniya 210% 500 Main 380,000 420,000 760 840 800 Coastline C overlooking 150% 750 Main 770,000 870,000 1,027 1,160 1,093 General Average in the Area 365,000 400,000 730 800 765 the Main Road Coastline C Internal Khaitan 210% 400 Internal 280,000 310,000 700 775 738 150% 750 Internal 500,000 550,000 667 733 700 (behind Khaitan Club) 210% 1000 Main 700,000 750,000 700 750 725 Streets General Average in the Area 457,500 502,500 633 698 666 Al Khairan Residential 210% 400 Internal 85,000 110,000 213 275 244 Jleeb Al Shuyoukh 210% 500 Internal 300,000 360,000 600 720 660 Sabah Al Ahmad Marine A1 (overlooking 210% 1200 Marine 280,000 300,000 233 250 242 General Average in the Area 340,000 400,000 680 800 740 the Sea) 210% 750 Internal 350,000 400,000 467 533 500 Al Ardiya Sabah Al Ahmad 210% 750 Main 390,000 450,000 520 600 560 Marine A2 (overlooking 210% 1200 Marine 290,000 330,000 242 275 258 General Average in the Area 370,000 425,000 493 567 530 the Sea) Khairan Pearl Marine Al Ahmadi Governorate achieved a limited increase of 2.2% in Q3 of 2014, as average price per square meter A3 City (overlooking 210% 640 Marine 250,000 280,000 391 438 414 recorded KD 597, compared to KD 584 in Q2. the Sea) Sabah Al Ahmad In Q3 of 2014, prices stabilized in several areas in the Governorate such as the sea and main coast strip C. While 210% 500 Internal 110,000 130,000 183 217 200 Marine A1 + A2 (Land) Al Aqiliyah witnessed a remarkable increase in by 6%, while reaching 7% in Jaber Al Ali. Average prices in Al Mangaf rose nearly by 7.5%, compared to Q2. They stabilized in Al Dhar, Al Fahaheel, Al Reqqah and Al Saba- Al Mangaf Residential 210% 375 Main 240,000 270,000 640 720 680 hiyah areas. Khiran Pearl witnessed a remarkable decline of 11.7% in Q3 of 2014. Prices stabilized in the least Al Mangaf Residential 210% 400 Main 250,000 280,000 625 700 663 areas in average price per square meter (Al Farawaniyah, Al Khiran Residential Area), while recording a limited The Governorate of Mubarak Al Kabeer recorded a slight increase by 1.6% in Q3 of 2014, as average price per decline of 1.9% in Sabah Al Ahmad marine area. square meter reached KD 844, compared to about KD 831 in Q2 of 2014. Average price per square meter for the Private Residence in Al Ahmadi Governorate during Q2 & Q3 of 2014 Compared to Q2 of 2014, prices stabilized in some areas in the governorate in Q3 the area of Costal Strip “B” KD which recorder the highest prices among the governorate, and Abu Al Hassanya the second highest prices, In 1,600 Al Adan, Al Qusoor and Mubarak Al Kabeer, average prices also stabilized. In Al Qurain, they rose slightly by 1%, Q2 2014 Q3 2014 1,400 while recording a limited increase of 3.7% in Al Masayel. They stabilized in Sabah Al Salem (Government Hous- 1,200 ing) and plot area in Al Ahmadi Governorate. 1,000 800 Al Finaitees recorded a remarkable increase of 8%, while average prices in Abu Fatira residential areas (the least 600 in price stability Governorate-wide) witnessed a remarkable rise by 10% in Q3 of 2014. 400 200 0 Coastal Coastal Al-Eqilah Jaber Coastal Mangaf Al-Zahr Al-Faha- Al-Reqat Al-Sabah- Hadeyyah Al-Fintas Loloat Al-Wafra Kheiran Sabah Strip C Strip C Al-Ali Strip C - Resid- (existing heel (Gov. iya (ex Agricu- Al-Kheiran (ex Reside- Al-Ahmed (Seafront) (Main) (Blocks) (Internal) ential house) House) house) ltural - A3 house) ntial - Seafront 22 Seafront City 23 KFH Local Real Estate Report 2014

Average Price per Square Meter for the Private Residence in Mubarak Al Kabeer Governorate Average price per square meter for the Private Residence in Al Jahra Governorate during Q3 & Q2 of 2014 during Q3 & Q2 of 2014

KD KD 1,400 Q2 2014 Q3 2014 Q2 2014 Q3 2014 700 1,200 600 1,000 500 800 600 400 400 300 200 200 0 100 Coastal Abu Al Al Adan Al Qurain Al Qosoor Mubarak Sabah Sabah Abu Fatira Strip B Al Hasania Masayel Al Kabeer Al Salem Al Salem Residential 0 (House) (Block) Sa’ad Al Nae’em Al Oyoon Al Jahraa Al Naseem Al Wahah Al Qasar Al Jahraa Al Abdullah Mutla’a St. Prices of Residential Plots of Land in Mubarak Al Kabeer Governorate

Market Value per Average Price Prices of Residential Plots of Land in Al Jahra Governorate % of Market Value of Land (KD) Region Area Site M² in (KD) per M² during Building Q3 2014 Market Value per Average Price From To From To % of Market Value of Land (KD) Region Area M² in (KD) per M² during 150% 1000 Internal 750,000 900,000 750 900 825 Building From To From To Q3 2014 Abu Al Hassaniya 150% 1000 Fahaheel 1,050,000 1,150,000 1,050 1,150 1,100 Al Qasr – Club Street 210% 1000 480,000 550,000 480 550 515 150% 2000 Marine 2,900,000 3,200,000 1,450 1,600 1,525 Al Qasr (Existing Houses) 210% 600 260,000 320,000 433 533 483 General Average in the Area 1,566,667 1,750,000 1,083 1,217 1,150 Al Jahra – Al Mutla’a St. - 210% 400 260,000 305,000 520 610 565 210% 400 Internal 300,000 340,000 750 850 800 Internal 210% 400 Main 340,000 380,000 850 950 900 Al Oyoun – (GVT House) – Al Masayel 210% 400 160,000 190,000 533 633 583 210% 500 Internal 340,000 380,000 680 760 720 Main Roads 210% 500 Main 370,000 430,000 740 860 800 Al Naim – Plots – Internal 210% 400 230,000 270,000 575 675 625 General Average in the Area 337,500 382,500 755 855 805 Streets Al Naim – (GVT House) – 210% 400 Internal 255,000 295,000 638 738 688 210% 400 200,000 240,000 500 600 550 Main Roads Abu Fatira 210% 400 Main 295,000 335,000 738 838 788 Up to Residential 210% 500 Internal 295,000 335,000 590 670 630 Oasis – Existing House 300 140,000 170,000 467 567 517 800 M² 210% 500 Main 330,000 370,000 660 740 700 Al Naseem (GVT House) – 210% 400 195,000 245,000 488 613 550 General Average in the Area 293,750 333,750 656 746 701 Main Roads In Al Jahra Governorate, prices slightly declined, as average price per square meter recorded about KD 599 in Q3 of 2014, with a limited drop of 3.2%, compared to KD 577 in Q2 of 2014. Most of the areas of the governorate witnessed price stability. They stabilized in Al Oyoun and Al Naim, while in Saad Al Abdullah (the highest in prices in the governorate), prices recorded a slight decline by 1%. Al-Mitlaa Street in Al-Jahra area recorded a slight decline of 1.7%. In Al Naseem, they recorded a limited decline by 1.7%, while recording a remarkable decline of 8.6%. In Al Jahra Old City, the price levels recorded a remarkable decline of 14.5%. Meanwhile, Al-Waha area recorded a limited increase of 3.3% during Q3 of 2014.

24 25 KFH Local Real Estate Report 2014

Second: Investment Land Prices Prices of Investment Lands in Capital Governorate

Overall, prices of investment lands recorded a limited increase across Kuwaiti governorates in Q3 of 2014, com- Market Value per Average Price % of Market Value of Land (KD) pared to Q2 of the same year. The overall average in all governorates recorded an increase by 2.1 % in Q3, com- Region Area Site M² in (KD) per M² during Building pared to their 3.5% increase in Q2 of 2014. From To From To Q3 2014 Arabian This increase was derived by the rise in average prices in all governorates. The average price per meter in the 250% 1,000 2,850,000 3,000,000 2,850 3,000 2,925 Capital Governorate rose by less than 1% in Q3,compared to its limited increase of 1.6% in Q2 2014. Average Gulf Rd price per meter reached about KD 2,657 in Q3, compared to KD 2,632 in Q2. Bneid Al Gar 250% 1,000 Istiqlal 2,000,000 2,100,000 2,000 2,100 2,050 250% 500 Internal 1,000,000 1,050,000 2,000 2,100 2,050 Regarding average prices of investment lands in the Capital Governorate, prices in Dasman stabilized, compared 250% 500 Main 1,050,000 1,100,000 2,100 2,200 2,150 to their levels in Q2 of 2014. Recorded prices in Al Muqawwaa East rose slightly by less than 0.5% in Q3 of 2014, while rising at 2.9% at Bnied Al Gar, compared to average prices recorded in Q2 of 2014. General Average in the Area 1,808,333 1,908,333 2,150 2,267 2,208 Eastern 240% 250 Internal 500,000 550,000 2,000 2,200 2,100 Average price per square meter for the Investment Residence properties in Kuwait Governorates Al-Muqawa 400% 500 Internal 1,300,000 1,450,000 2,600 2,900 2,750 during Q3 & Q2 of 2014 General Average in the Area 1,575,000 1,712,500 2,638 2,875 2,756 Arabian KD 400% 1,000 3,300,000 3,450,000 3,300 3,450 3,375 Q2 2014 Q3 2014 Gulf Rd 3,500 Dasman 400% 1,000 Internal 2,500,000 2,750,000 2,500 2,750 2,625 3,000 Abdullah 400% 750 2,200,000 2,325,000 2,933 3,100 3,017 2,500 Al Ahmad 2,000 General Average in the Area 2,666,667 2,841,667 2,911 3,100 3,006 1,500 Hawalli Governorate witnessed a limited increase of 2% in Q3, compared to Q2 of 2014. The average price per 1,000 square meter recorded KD 2,027 in Q3 compared to an average of KD 1,988 in Q2. 500 0 Al Shaab, the highest value in the governorate, recorded a slight increase of less than 1% in Q3, while Al Salmiya area witnessed a limited increase of 1.9% and Al Jabriya recorded an increase of 3.8%, compared to Q2. Hawalli Shaab Sabah

Khitan witnessed a limited increase of 2.2% in Q3. Jabriya Hawally Dasman Al Jahra Salmiya Al Salem Abo Hlifa Al Funtas Al Mangaf Farwaniya Al Rwqea’e Bned Al Qar Al Fahaheel Al Meqawaa Al Mahboula Jeleeb Shyoukh

26 27 KFH Local Real Estate Report 2014

Prices of Investment Lands in Hawalli Governorate Prices of Investment Lands in Al Farwaniya Governorate

Market Value per Average Price Market Value per Average Price % of Market Value of Land (KD) % of Market Value of Land (KD) Region Area Street M² in (KD) per M² during Region Area Site M² in (KD) per M² during Building Building From To From To Q3 2014 From To From To Q3 2014 250% 750 Al Muthanna 1,400,000 1,500,000 1,867 2,000 1,933 250% 750 Airport 1,480,000 1,600,000 1,973 2,133 2,053 250% 750 Qutaiba 1,500,000 1,625,000 2,000 2,167 2,083 250% 750 6th Ring Road 1,450,000 1,550,000 1,933 2,067 2,000 Farwaniya 250% 750 Al Hasan Al Basri 1,400,000 1,500,000 1,867 2,000 1,933 250% 1,000 Main 1,700,000 1,800,000 1,700 1,800 1,750 Hawalli 250% 750 Ahmad Ibn Tulun 1,400,000 1,500,000 1,867 2,000 1,933 250% 1,000 Internal 1,520,000 1,750,000 1,520 1,750 1,635 250% 750 Al Yarmouk 1,350,000 1,450,000 1,800 1,933 1,867 General Average in the Area 1,333,333 1,441,667 1,804 1,942 1,873 250% 750 Musa bin Nusair 1,325,000 1,475,000 1,767 1,967 1,867 250% 1,000 Airport 1,800,000 1,950,000 1,800 1,950 1,875 General Average in the Area 1,413,667 1,519,833 1,843 1,983 1,913 Khaitan 250% 750 Main 1,330,000 1,400,000 1,773 1,867 1,820 250% 1,000 Arabian Gulf Rd 2,800,000 3,000,000 2,800 3,000 2,900 250% 1,000 Internal 1,500,000 1,700,000 1,500 1,700 1,600 250% 750 Baghdad (Tahrir) 1,500,000 1,600,000 2,000 2,133 2,067 General Average in the Area 1,356,000 1,490,000 1,655 1,813 1,734 A/ Karim 250% 750 6th Ring Road 1,325,000 1,400,000 1,767 1,867 1,817 250% 750 1,500,000 1,600,000 2,000 2,133 2,067 Jleeb Al Khattabi Police Station Al Shuyoukh 250% 750 1,300,000 1,450,000 1,733 1,933 1,833 250% 750 Qatar 1,475,000 1,575,000 1,967 2,100 2,033 St. Al Salmiya Abdullah bin General Average in the Area 1,145,000 1,261,429 1,696 1,863 1,779 250% 750 1,425,000 1,500,000 1,900 2,000 1,950 Masoud 250% 750 4th Ring Road 1,450,000 1,550,000 1,933 2,067 2,000 Al Raqei Youssef bin th 250% 750 1,425,000 1,500,000 1,900 2,000 1,950 250% 750 5 Ring Road 1,425,000 1,525,000 1,900 2,033 1,967 Hamoud General Average in the Area 1,478,571 1,564,286 1,875 1,989 1,932 Hamad Al 250% 750 1,475,000 1,600,000 1,967 2,133 2,050 Mubarak General Average in the Area 1,529,688 1,629,219 1,984 2,115 2,050 250 % 1000 Arabian Gulf Rd 2,850,000 3,000,000 2,850 3,000 2,925 Al Shaab 250 % 1000 Istiqlal 1,950,000 2,100,000 1,950 2,100 2,025 General Average in the Area 2,025,000 2,137,500 2,142 2,263 2,202 250 % 1000 4th Ring Road 2,000,000 2,100,000 2,000 2,100 2,050 Al Jabriya 250 % 1000 Maghreb 1,850,000 1,900,000 1,850 1,900 1,875 250 % 1000 Al Shanakel 1,850,000 1,950,000 1,850 1,950 1,900 General Average in the Area 1,828,571 1,921,429 1,895 1,993 1,944

In Al-Farwaniya Governorate, average price per meter recorded about KD 1,830 in Q3, in a slight increase of 1.8%, compared to KD 1,797 in Q2 of 2014. Al Raqei (the highest in average price per square meter among all governorates) witnessed an increase by 5.4%, compared to Q2, whereas Al Farwaniya recorded a slight increase of 1.9%. Jleeb Al Shuyoukh witnessed a slight decline by less than 1%, with Khaitan recording a slight increase of less than half percent in Q3.

28 29 KFH Local Real Estate Report 2014

Al Ahmadi Governorate recorded a slight increase of 1.7% in Q3 of 2014 with an average price of KD 1,609 per The Governorate of Mubarak Al Kabeer witnessed a slight increase of less than 1% with an average price of about square meter, compared to an average price of KD 1,502 in Q2 which witnessed a remarkable increase of 8.4%. KD 1,558 in Q3 of 2014, compared to about KD 1,554 in Q2 of 2014. Abu Halifa (the highest area in the governorate in terms of average price) witnessed a remarkable increase of In Q3, most areas in Sabah Al Salem recorded a limited increase in main and internal areas overlooking the 6th 7.5% in Q3, followed by Al Fintas with an increase of 6.7%. Average prices rose in Al Mahboula by 7.3%, while Ring Road, while they improved in some internal areas, recording a limited rise of 3%. Al Fahaheel witnessed a they rose by 8.2% in Al Fahaheel (highest rise in the governorate) while Al Mangaf area rose by 6% in Q3 2014. limited increase of 2% in Q3.

Prices of Investment Lands in Al Ahmadi Governorate Prices of Investment Lands in Mubarak Al Kabeer Governorate

Market Value per Average Price Market Value per Average Price % of Market Value of Land (KD) % of Market Value of Land (KD) Region Area Site M² in (KD) per M² during Region Area Site M² in (KD) per M² during Building Building From To From To Q3 2014 From To From To Q3 2014 250% 500 Main 1,100,000 1,162,500 1,467 1,550 1,508 250% 750 Internal 1,125,000 1,250,000 1,500 1,667 1,583 Al Fintas 250% 750 Fahaheel 1,162,500 1,240,000 1,550 1,653 1,602 250% 750 Main 1,180,000 1,300,000 1,573 1,733 1,653 250% 1,000 Coastal Road 1,950,000 2,100,000 1,950 2,100 2,025 Sabah Al Salem 250% 1,000 Internal 1,450,000 1,650,000 1,450 1,650 1,550 General Average in the Area 1,189,000 1,280,500 1,551 1,674 1,613 250% 1,000 Main 1,600,000 1,700,000 1,600 1,700 1,650 250% 750 Internal 1,012,500 1,100,000 1,350 1,467 1,408 Abu Halifa 250% 1,000 Fahaheel 1,750,000 1,800,000 1,750 1,800 1,775 250% 750 Main 1,100,000 1,162,500 1,467 1,550 1,508 General Average in the Area 1,337,143 1,438,571 1,529 1,649 1,589 General Average in the Area 1,195,625 1,290,625 1,552 1,679 1,615 250% 750 Internal 1,012,500 1,100,000 1,350 1,467 1,408 Al Mangaf Internal 250% 750 1,050,000 1,125,000 1,400 1,500 1,450 Water Station St. General Average in the Area 1,176,250 1,260,833 1,540 1,653 1,597 250% 500 Internal 720,000 800,000 1,440 1,600 1,520 Al Mahboula 250% 750 Main 1,012,500 1,100,000 1,350 1,467 1,408 General Average in the Area 1,189,000 1,280,500 1,551 1,674 1,613 250% 500 Internal 800,000 860,000 1,600 1,720 1,660 250% 750 Main 1,050,000 1,125,000 1,400 1,500 1,450 Al Fahaheel 250% 1000 Makkah 1,125,000 1,200,000 1,500 1,600 1,550 250% 750 Al Badaweya 1,700,000 1,800,000 1,700 1,800 1,750 General Average in the Area 1,104,167 1,181,667 1,550 1,663 1,607

Al Jahra Governorate witnessed a slight increase of 1.9% in Q3 of 2014, while it witnessed the highest increase rate at 2Q 2014, it recorded an average price of about KD 1,538, compared to KD 1,512 in Q2 of 2014.

Prices of Investment Lands in Jahra Governorate

Market Value per Average Price % of Market Value of Land (KD) Region Area Site M² in (KD) per M² during Building From To From To Q3 2014 250% 1,000 Internal 1,250,000 1,350,000 1,250 1,350 1,300 250% 1,000 Main 1,450,000 1,600,000 1,450 1,600 1,525 Al Jahra 250% 800 Al Khuzami 1,325,000 1,400,000 1,656 1,750 1,703 250% 500 Internal 700,000 800,000 1,400 1,600 1,500 250% 500 Main 800,000 860,000 1,600 1,720 1,660 General Average in the Area 1,105,000 1,202,000 1,471 1,604 1,538

30 31 KFH Local Real Estate Report 2014

Annual Rate of Return on Investment Properties Third: Commercial Property Prices Demand on investment properties is associated with the rates of return (ROIs) achieved by these investments. In Average prices of commercial properties stabilized in all Kuwaiti governorates at a slight increase of less than Q3 of 2014, ROIs kept their 6.25-6.75% range across the Capital, while recording 6.67% in Hawalli Governorate. 1% in Q3, compared to Q2. The Capital Governorate (predominantly administrative in nature), especially in the In Q3, ROIs across Hawalli ranged between 6.38% and 7%, 7.1% in Al Farwaniya and 6.6-7.25% in Al-Ahmadi. In main region of Ahmad Al Jaber Street, Al Shuhada’a and Jaber Al Mubarak Streets along with some other sur- Mubarak Al-Kabeer, ROIs increased, ranging between 7% and 7.38%, while stabilizing in Al Jahra around 7 to 7.25%. rounding streets, the average price per meter stabilized at KD 5,948 in Q3 2014. Investment properties ROIs still enjoy competitiveness and stability, compared to ROIs on bank deposits or Prices stabilized in all areas of commercial properties in the governorate compared to Q2 of 2014. This applies Kuwait Stock Exchange fluctuating returns. to Al Madina, Al Qiblah and East Areas, where average prices stabilized, compared to Q2.

Annual Investment Property ROI in some Average price per square meter of Commercial Properties across Kuwaiti Governorates Percentage of Sale Return of the Annual % of during Q2 & Q3 of 2014 Governorate Region Area Site Real Estate Income in Q3 2014 Building From To Average KD

Bneid Al Gar 250% 1,000 Arabian Gulf Rd 6.00% 6.50% 6.25 % 7,000 Q2 2014 Q3 2014 Bneid Al Gar 250% 1,000 Istiqlal 6.25% 7.00% 6.63% 6,000 The Capital Eastern Al Muqawa 250% 250 Internal 6.50% 7.00% 6.75% 5,000 Dasman 250% 1,000 Arabian Gulf Rd 6.25% 7.00% 6.50% 4,000 3,000 Hawalli 250% 750 Al-Muthanna 6.50% 7.00% 6.75% 2,000 Hawalli 250% 1,000 Al Hasan Al Basri 6.50% 7.00% 6.75% 1,000 0 Al Salmiya 250% 1,000 Arabian Gulf Rd 6.00% 6.00% 6.00% Hawalli Capital Hawally Al Jahraa Al Ahmadi Al Salmiya 250% 1,000 Baghdad 6.25% 6.50% 6.38% Al Shaab 250% 1,000 Arabian Gulf Rd 6.00% 6.50% 6.25% Al Shaab 250% 1,000 Istiqlal 6.25% 7.00% 6.63% Prices of Commercial Lands in the Capital Governorate

Al Farwaniya 250% 1,000 Airport 7.00% 7.00% 7.00% Market Value per Average Price % of Market Value of Land (KD) Al Farwaniya 250% 1,000 Airport (Main Site) 7.00% 7.00% 7.00% Region Street Area M² in (KD) per M² during Building Al Farwaniya Khaitan 250% 750 Internal 7.00% 7.50% 7.25% From To From To Q3 2014 Al Raqei 250% 750 4th Ring Road 6.75% 7.00% 6.88% Al Qiblah 300% Al Mubarakiya 500 2,375,000 2,875,000 4,750 5,750 5,250 Al Raqei 250% 750 5th Ring Road 6.75% 7.00% 6.88% Al Sharq 520% Ahmad Al Jaber 500 3,250,000 3,500,000 6,500 7,000 6,750 Mubarak Al Kabeer 620% 500 2,975,000 3,250,000 5,950 6,500 6,225 Al Fintas 250% 500 Internal 7.00% 7.50% 7.25% Fabrics’ Blocks Al Madina Mubarak Al Kabeer 4,000,000 Abu Halifa 250% 500 Internal 7.00% 7.50% 7.25% 620% 500 3,750,000 7,500 8,000 7,750 (Stock Exchange) Abu Halifa 250% 750 Internal 7.00% 7.50% 7.25% Al Qiblah 620% Fahd Al Salem 500 3,450,000 3,625,000 6,900 7,250 7,075 Al Mangaf 250% 500 Internal 7.00% 7.25% 7.13% 3,050,000 Al Ahmadi Al Mahboula 250% 500 Internal 7.00% 7.50% 7.25% Al Sharq 520% Jaber Al Mubara 500 2,950,000 5,900 6,100 6,000 Al Mahboula 250% 750 Internal 7.00% 7.50% 7.25% Al Mahboula 250% 750 Main 7.00% 7.50% 7.25% Hawalli Governorate witnessed a slight increase of less than 1% in Q3 of 2014, with about KD 3,539 per square Al Fahaheel 250% 500 Internal 7.00% 7.50% 7.25% meter, compared to a slight increase of 1.3 in Q2 with an average price of KD 3,525 in Q2 of 2014. Al Fahaheel 250% 500 Main 7.00% 7.00% 7.00% The highest areas in prices in the governorate witnessed a slight increase of less than 1% for commercial prop- erties in Tunisia and Beirut Streets. Prices stabilized in Al-Othman and Ibn Khaldoun Streets, while some places Al Jahra 250% 1000 Internal 7.00% 7.50% 7.25% in Al Salmeyah (e.g., Hamad Al Mubarak Street) witnessed a limited increase of 1.36%. In other places in Al Al Jahra Al Jahra 250% 1000 Main 7.00% 7.50% 7.25% Salmeyah, such as Salem Al Mubarak and Hamad Al Mubarak Streets, they stabilized.

Mubarak Sabah Al Salem 250% 750 Internal 7.00% 7.25% 7.13% Al Kabeer Sabah Al Salem 250% 750 Main 7.00% 7.00% 7.00% 32 33 KFH Local Real Estate Report 2014

Prices of Commercial Lands in Hawalli Governorate Commercial property prices in Al Jahra Governorate recorded an average price of KD 2,855 per square meter witnessed a slight decrease by less than 1%, compared to an average of KD 2,868 in Q2 of 2014. Prices in the Market Value per Average Price Administrative and Commercial Center of Al Jahra (the highest in prices in the governorate) witnessed a remark- % of Market Value of Land (KD) Region Street Area M² in (KD) per M² in Q3 Building able increase of 6.4%in Q3, while increasing at 6.5% in Al Qaisareyat during Q3. Prices declined in some areas From To From To 2014 by 3.6%, recording a remarkable decline of 14.6% in other areas in Q3, compared to Q2. 180% Tunis 1,000 3,800,000 4,250,000 3,800 4,250 4,025 Hawalli Prices of Commercial Lands at Al Jahra Governorate 180% Beirut 1,000 3,750,000 4,100,000 3,750 4,100 3,925 180% Salem Al Mubarak 800 3,040,000 3,600,000 3,800 4,500 4,150 Market Value per Average Price Al Salmiya % of Market Value of Land (KD) Region Street Area M² in (KD) per M² in Q3 180% Bahrain 500 1,425,000 1,550,000 2,850 3,100 2,975 Building From To From To 2014 In Al Farwaniya, the average price per square meter reached about KD 2,504, in a slight increase of less than 1% Marzouk Al- Al Jahra 180 % 1,000 3,000,000 3,250,000 3,000 3,250 3,125 in Q3. However, most of the areas in the governorate (e.g., Habib Minawer Street) witnessed stability in prices. Mat’aab They recorded a limited increase of 2% in the Fire Brigade Street, stabilizing in Khitan opposite the Commercial Al Jahra Admin. Admin. & 300 % 875 3,325,000 3,500,000 3,800 4,000 3,900 and Administrative Center. In Jleeb Al Shuyoukh, the area opposite to the Cooperative Association recorded a & Comm. Center Commercial limited increase of 4%. However, the increase reached 4.8% in other internal places in Jleeb Al Shuyoukh. In Al Jahra 50 % Plot 41 A 1,000 2,300,000 2,500,000 2,300 2,500 2,400 Al Dajeej, prices stabilized in Q3. In addition, Khaitan South and Al Ardiya Stores, prices did not witness any change, compared to recorded prices of Q2. In Q3, average Price per square meter in Al Ahmadi Governorate reached about KD 3,050, in a limited increase Prices of Commercial Lands at Al Farwaniya Governorate of 2.7%, compared to KD 2,969 in Q2 of 2014. Prices in Al Mangaf area witnessed a limited increase of 2.4%, compared to Q2. In some major places in the Market Value Average Price % of Market Value of Land (KD) Administrative and Commercial Center of Al Fintas, prices recorded a substantial increase of 5.1%, while some Region Street Area per M² in (KD) per M² in Q3 Building internal places at this area witnessed a remarkable increase of 9.5% during Q3 2014, while a limited increase 2014 From To From To of 4.8% in internal places in Al Fahaheel in Q3. In some places in Khairan Pearl, prices witnessed a substantial Al Farwaniya 180% Menawer 1,000 4,600,000 5,000,000 4,600 5,000 4,800 increase of 8.2%, stabilizing in other places in the area compared to Q2. Menawer St. Al Farwaniya Prices of Commercial Lands at Al Ahmadi Governorate 180% Fire Brigade St. 800 3,200,000 3,400,000 4,000 4,250 4,125 Fire Brigade St. Market Value per Average Price Opposite % of Market Value of Land (KD) the dmin. & Region Street Area M² in (KD) per M² in Q3 Khaitan 180% 1,000 4,000,000 4,300,000 4,000 4,300 4,150 Building Commercial From To From To 2014 Building Al Mangaf 300 % Al Aziziya 750 1,500,000 1,687,500 2,000 2,250 2,125 Khaitan (Admin & Al Fintas Admin. 180 % Main 1,000 3,500,000 3,700,000 3,500 3,700 3,600 (Admin & 300% 1,000 3,900,000 4,100,000 3,900 4,100 4,000 Commercial) & Comm. Commercial) 180 % Internal 1,000 3,450,000 3,500,000 3,450 3,500 3,475 Jleeb Al 180 % Al Dabous 750 2,775,000 2,962,500 3,700 3,950 3,825 Shuyoukh Al Fahaheel 180 % Internal 750 2,362,500 2,550,000 3,150 3,400 3,275 180% Coop Society St. 1,000 2,450,000 2,750,000 2,450 2,750 2,600 (Opposite 180 % Coast Road 750 3,262,500 3,412,500 4,350 4,550 4,450 Society) Jleeb Al Shuyoukh 180% Internal 1,000 2,100,000 2,300,000 2,100 2,300 2,200 (Background) Al Dajeej (5000 M) on 6th Ring Road 5,000 6,650,000 7,000,000 1,330 1,400 1,365 the 6th R. R. 210% Al Dajeej (5000 Internal 5,000 5,250,000 6,000,000 1,050 1,200 1,125 M) Internal Al Dajeej – 250% 6th Ring Road 5,000 2,900,000 3,000,000 580 600 590 South Khaitan

34 35 KFH Local Real Estate Report 2014

Commercial Properties’ Annual ROI Fourth: Prices of Industrial Plots (Public Service Contracts) and Warehouses Commercial property ROIs are still much less than those generated by investment properties in some gover- In Q3, prices of industrial plots witnessed a limited decline of 2.5% in Kuwaiti Governorates, save Al Ahmadi norates. This is due to the decline in occupancy rates in office building sector, especially in the Capital where where they witnessed a remarkable decline, as well Al Jahra governorate recorded a slight decline. average annual ROI stabilized around 6.25%, 7.2% in Hawalli and 7.6% in Al Farwaniya. ROIs declined to 7.53% in Al Jahra and 7.39% in Al Ahmadi. In Q3 2014, prices per square meter of the industrial plots in the Capital recorded about KD 1,347. Annual Investment Properties ROI in some areas of Kuwait In Canada-Dry Street in Al Shuwaikh, price levels of industrial plots stabilized. In addition, prices witnessed a remarkable stability in Shahrazad and Al Zeina Streets (having recorded a remarkable increase of 9.5% in the Percentage of Sale Return of the latter).They also stabilized in Pepsi and Electricity Streets, as well as in internal places, having recorded a sub- % of th Governorate Region Street Annual Real Estate Income in Q3 2014 stantial increase of 6.5% in Q2. Prices also stabilized in the rest of places in the 4 Ring Road, the industrial Building From To Average Plots in Al Ghazali Street and Mohammad Al Qasim Street in Al Shuwaikh industrial zone in Q2 2014. Al Qiblah 300% Al Mubarakiya 6.00% 6.50% 6.25% Average market value per square meter for the Industrial and Professional property Sharq 520% Ahmad Al Jaber 6.00% 6.50% 6.25% in Kuwait Governorates during Q2 & Q3 of 2014 Sharq 520% Khalid Ibn Al Waleed 6.00% 6.50% 6.25% KD The Capital Al Madina 620% Al Soor 6.00% 6.50% 6.25% 2,000 Q2 2014 Q3 2014 Al Madina 300% Al Soor 6.00% 6.50% 6.25% Al Madina 620% Mubarak Al Kabeer - Blocks 6.00% 6.50% 6.25% 1,500

Hawalli 180% Tunis 7.00% 7.50% 7.25% 1,000 Hawalli 180% Beirut 7.00% 7.50% 7.25% Hawalli Al Salmiya 180% Hamad Al Mubarak 7.00% 7.50% 7.25% Al Salmiya 180% Salem Al Mubarak 7.00% 7.00% 7.00% 500

Al Farwaniya 180% Menawer 7.00% 7.50% 7.25% 0 Menawer St. Al Farwaniyah The Capital Mubarak Al Kabeer Al Ahmadi Al Jahraa Al Farwaniya Fire 180% Fire Brigade 7.00% 7.50% 7.25% Brigade St. Prices of Industrial Plots in the Capital Khaitan 180% --- 7.00% 7.50% 7.25% Al Average Price Khaitan (Admin. (Administrative & Commer- % of Farwaniya 300% 7.00% 7.50% 7.25% Region Allocation Area Street Market Value of Land (KD) per M² in Q3 & Commercial) cial) Building 2014 Ground 170% 1,000 Canada Dry St. 1,550,000 1,650,000 1,600 Al Ardiya 80% Internal 7.50% 8.00% 7.75% “Warehouses” Mezzanine 170% 5,000 Shahrazad St. 6,000,000 6,250,000 1,225 50% 170% 1,000 Al Zainah St. 1,200,000 1,250,000 1,225 170% 1,000 Al Zainah St. 1,350,000 1,550,000 1,450 Al Jahra 180% Marzouk Al-Mat’aab 7.50% 7.50% 7.50% 170% 500 Al Zainah St. 825,000 875,000 1,700 Al Jahra (Administrative & Industrial Exhibitions + 170% 500 Electricity St. 850,000 900,000 1,750 (Admin. & 300% 7.50% 7.50% 7.50% Al Jahra Commercial) Shuwaikh Industrial Commercial) 170% 5,000 Pepsi St. 5,000,000 5,250,000 1,025 th Al Jahra - 170% 1,000 4 Ring Road 1,525,000 1,575,000 1,550 300% Plot 20 7.50% 7.50% 7.50% Al-Quisareyat Mohammad 170% 1,000 1,150,000 1,250,000 1,200 Al Qasim Al Mangaf 300% Al Aziziya 7.50% 7.50% 7.50% 170% 22,500 Internal 12,550,000 14,500,000 601 Al Fintas (Admin. Al Ahmadi 180% Main 7.50% 7.50% 7.50% 170% 1,000 Al Ghazali St. 1,100,000 1,200,000 1,150 & Commercial) General Average in the Area 3,032,727 3,336,364 1,341 Al Fahaheel 180% Al Dabous 7.00% 7.50% 7.25%

36 37 KFH Local Real Estate Report 2014

Likewise, Al Farwaniya Governorate witnessed price stability in Q3 in most of the areas in the governorate, com- Prices of Industrial Plots in Al Ahmadi Governorate pared Q2 recorded prices. Average Price In Q3 2014, price levels stabilized in Al Ardiya Craft Area, while some places facing Al Ardiyah stores witnessed a Region Allocation Area Street Market Value of Land (KD) per M² in Q3 limited increase of 3.6%. In some areas on the 5th Ring Road, prices increased by 3.8 % and stabilized in internal 2014 places in the area. Al Shuaiba - West 120,000 Behind the Gas Station 10,500,000 13,000,000 97.9 In Q3 2014, Al Rai area witnessed a remarkable stability in all places, as well as in some places in Al Ghazali Al Shuaiba - West Industrial 10,000 Internal 1,150,000 1,300,000 122.5 Street and Mohammad Al Qasim Street. Average price per square meter in the governorate stabilized at KD Mina Abdullah 10,000 Inside the Port 950,000 1,150,000 105 1,849. General Average in the Area 3,183,750 3,768,750 123 Prices of Industrial Plots in Al Farwaniya Exhibitions + 1,000 Sultan Center St. 1,20,000 1,500,000 735 Industrial Al Fahaheel 1,000 Opposite Fire Brigade 700,000 800,000 750 % Construction = Average Price % of 170% 1,000 Internal Streets 500,000 650,000 575 Region Allocation Area Site Street Market Value of Land (KD) per M² in Q3 Building 2014 General Average in the Area 440,000 933,333 687 Safat Al Ghanim Exhibitions + 7,500 Mustafa Karam 4,500,000 5,000,000 633 170 % 1,000 Main 1,225,000 1,350,000 1,288 (till Al Nasr Sports) East of Ahmadi Industrial Exhibitions Industrial Area % Construction = Al Rai 170 % 1,000 Main Al Ghazali St. 1,200,000 1,250,000 1,225 5,000 Main 2,050,000 2,300,000 435 + Industrial 170% Mohammad Al 170 % 4,000 Main 5,500,000 5,750,000 1,406 General Average in the Area 2,175,000 2,445,000 471 Qasim General Average in the Area 2,570,833 2,758,333 1,180 Prices of Industrial Plots in the Al Jahra Governorate Opposite Al Ardiya 130 % 250 Main 625,000 700,000 2,650 Ardiya Craft Stores Average Price Crafts Area Opposite Al Ardiya Region Allocation Area Street Market Value of Land (KD) per M² in Q3 130% 250 Main 560,000 625,000 2,370 Residential 2014 General Average in the Area 596,250 662,500 2,518 Amghara Large 10,000 Internal 1,500,000 1,700,000 160 Contractors 10,000 Main 1,850,000 2,050,000 195 In Q3 2014, average price per meter in Al Ahmadi Governorate recorded around KD 427, in a remarkable de- General Average in the Area 777,500 855,000 177 crease of 21%, compared to about KD 540 in Q2. 500 Internal 165,000 185,000 350 Al Jahra Crafts In Q3, prices In Al Fahaheel (the highest in prices in the governorate) witnessed a remarkable decrease of 500 Main 200,000 220,000 420 27.5%, while prices at East Al Ahmadi Industrial Area witnessed a remarkable decrease of 14%. General Average in the Area 176,250 196,250 478 In Q3, average prices stabilized in Al Shuaiba and Mina Abdullah (in the gravel storage area of Mina Abdullah Doha Ships Repair 1,000 Main 120,000 170,000 145 and the internal places inside the Port ), compared to Q2. In Al Shuaiba, prices stabilized in main streets, as well General Average in the Area 1,890,000 2,206,667 48 as in other main streets in the area and in Jawharat Al Fanar. They also stabilized in the area behind the gas station, while the highest place in the area recorded an increase of 4.6%. Prices of Industrial Plots in the Mubarak Al Kabeer Governorate

Average Price Region Allocation Area Street Market Value of Land (KD) per M² in Q3 2014 1,000 Main 1,650,000 1,750,000 1,700 Abu Fatira Crafts Exhibitions 500 Main 640,000 680,000 1,320 General Average in the Area 1,164,000 1,252,000 1,461 1,000 Main 500,000 600,000 550 Sabhan Industrial 1,000 Pepsi 650,000 750,000 700 5,000 Pepsi 2,750,000 3,000,000 575 General Average in the Area 1,341,667 1,516,667 512.5

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Fifth: The Prices of the Farms and Cattle Farms (Jawakheer) Sixth: Chalet Prices Al Ahmadi Governorate, prices in cattle farms (Jawakheer) stabilized around about KD 79.4 for average price per Like other types of property, chalet prices depend on the volume of demand, which may increase, especially meter, while recording a remarkable increase of 11% in camel farms in Q3 of 2014. in summer time. As Q3 of 2014 coincided with the holidays and the summer season, which means an increase in the demand on chalets, the prices stabilized in the areas of Al Ahmadi Governorate in general, recording KD In Equestrian Stables, recorded prices in Q3 stabilized, compared to average price per meter recorded in Q2 of 18,714, in an increase of 6.6% in Q3 of 2014. However, prices stabilized in the Capital Governorate, after an in- 2014. Prices stabilized in some internal areas and the area of the racecourse in Q3 of 2014. crease of 7.8% in the chalet area in Q2 of 2014, with a price of KD7,833 per square meter in Q2 of 2014. The prices stabilized in some internal and major places in Al Wafra Cattle Farm area in Q3 2014. Average prices of chalets in AlSabiyah and Kazma in AL Jahra Governorate stabilized at about KD 4,979 in Q3.

Average market value per square meter for Cattle Farms and Stables Chalet Prices in Al Ahmadi Governorate in Al Ahmadi Governorate during Q2 & Q3 of 2014 ** A/P per Length Price per Linear Market Value per Chalet Meter of Land KD of the Meter of the Governorate Region (Land) at Waterfront 90,000 Q2 2014 Q3 2014 Waterfront Waterfront (KD) during Q3 80,000 by Meter From To From To 2014 70,000 Mina Abdullah 15 255,000 270,000 17,000 18,000 17,500 60,000 50,000 Al Dubaeya 15 255,000 270,000 17,000 18,000 17,500 40,000 Al Julaia 15 315,000 345,000 21,000 23,000 22,000 Bnaider 15 375,000 435,000 25,000 29,000 27,000 30,000 Al Ahmadi 20,000 Al Zour 15 225,000 240,000 15,000 16,000 15,500 10,000 Khairan 15 240,000 255,000 16,000 17,000 16,500 0 (other than Al Khor) Kabd Stables Hejn Stables Farosia Stables Wafra Stables Nuwaiseeb 15 210,000 240,000 14,000 16,000 15,000 Meanwhile, Al Wafra agricultural area has witnessed a slight decrease of 1%, compared to price levels in Q2 of 2014. some places witnessed a slight increase of 2.3% in Q3 of 2014, stabilizing in all cow farms (Usufruct) in Al ** A/P= Average Price per meter Sulaibiya where they recorded KD 550 to 650 thousand for an area of 50,000 m2. Another area of 1 million m2 recorded a price ranging between 3.65 and 4.35 million Dinars in Q3 of 2014. Prices per square meter for 100,000-m2 plots in Al Abdali recorded a limited increase of 3%, with a price rang- ing between KD 280,000 and KD 350,000 in Q3 of 2014.

Prices of Farm lands and Cattle Farms Estimated Price Price per M² of ** A/P during Governorate Region Area Site of Usufruct in Plot (KD) land in (KD) Q3 2014 From To From To Kabd Farms 2,500 Internal 72,000 90,000 28.8 36.0 81,000 Kabd Farms 2,500 Main 100,000 115,000 40.0 46.0 107,500 500 Internal 38,000 45,000 76.0 90.0 41,500 Al Ahmadi Equestrian Stables The Racecourse 500 45,500 50,000 91.0 100.0 47,750 Al Ahmadi the Golf Al Wafra Farms 2,500 Main 65,000 77,500 26.0 31.0 71,250

** A/P= Average Price of the Plot

40 41 KFH Local Real Estate Report 2014

Seventh: Occupancy Rates and Rentals The rate of occupancy have stabilized at their previous values (90-96%) for all levels of investment property Regarding the rental values of industrial plots, the rental price of the industrial square meter of the ground types, while occupancy rates of commercial properties improved, especially in the offices located in the Capital floor – showrooms – has ranged between KD 14 to KD 40 Al Shuwaikh Industrial Area, given that the prices dif- area. fer according to location. Al Rai buildings area ranked second, with an average rental value per meter ranging between KD 14 to KD 30, whereas average price per rental meter in Al Ardiya (Stores) was between KD 6.5 to KD Investment Housing Rentals 8, and it would significiantly exceed the price to record a price that ranges between KD 20 to KD 40 for average The average rental of a apartment consisting of two rooms and a hall with an area of 60 m² in the Capital ranges Price per rental meter at Al Ardiya (Craft) area. The price per meter at East Al Ahmadi has recorded an average between KD 330 and KD 350, KD 310-350 in Hawalli,KD 280-330 in Al Farwaniya and KD 260-KD 290 in Al Ah- that ranges between KD 12 to KD 18, whereas the prices at Al Fahaheel industrial area have ranged between madi. The Rentals recorded between KD 285-300 in Mubarak Al Kabeer and KD 260-280 in Al Jahra. As for the KD 14 to KD 20 per square meter. On the other hand, the prices of owned apartments and the units of “owned” apartments consisting of two rooms and a hall with an area of 70-74 m2, the rentals have ranged between KD commercial stores have witnessed an increase in the prices. 390 and KD 415 in the Capital, KD 320 and KD 370 in Hawalli, KD 320 to KD 350 in Al Farwaniya. This rental de- creases to KD 300-340 in Al Ahmadi Governorate, KD 325-350 in Mubarak Al Kabeer, and KD 290-330 in Al Jahra. It is worth mentioning that this report surveys the general transaction prices in the Kuwaiti real estate market. 80-85 square meter investment apartment rental were KD 435-465 in the Capital, KD365-450 in Hawalli, KD However, the method used by the Evaluation and Studies Department at “KFH” depends on studying individual 350-390 in Al Farwaniya, KD 330-360 in Al Ahmadi, KD 330 and 360 in Mubarak Al Kabeer and Al Jahra, respec- property and its characteristics and defining its rental value and returns in order to adopt a special recommen- tively. dation and a fair evaluation of each property. 100-110 square meter apartment rentals were KD 500-580 in the Capital, KD 485-550 in Hawalli, up to KD 485 in Al Farwaniya and KD 425-450 in Al Ahmadi. They slightly increase in Mubarak Al Kabeer (KD 450-480), reach- ing KD 430-460 in Al Jahra. Prices vary depending on the area, design quality, finishing and location. A building’s age is a main factor in determining the average rental value in Kuwait. However, we focus in this report on the prices of new real prop- erties, which by their high prices pose pressure on rental values the old properties available in the market, and therefore when they are vacated, the owner of the building would raise the rental value to the new lessee. The average trading of the property is considered an important matter upon the assessment of the rental value, as there are distinct areas, such as Al Shaab, Al , Bneid Al Gar, Sharq and other places among the distinct areas such as Qatar and Bahrain Street at Al Salmiya and the real estate buildings overlooking the coast, and Qutaiba and Al Muthanna at Hawalli, and there are less distinct areas such as Jleeb Al Shuyoukh, Abu Halifa and Khaitan. Recently, the phenomenon of furnishing the buildings, especially the distinct ones, and therefore the rental value would be defined in accordance with the different levels. What attracts attention is the expansion of the range of rentals in the internal areas inhabited by Kuwaitis, such as the areas of Salwa, Al Surra and South Surra, as other areas are under the pressure of the increase of real estate prices and improving the ability to settle the loans. As regards the average rent as per the commercial meter at the ground floor, the average rent has increased and ranged between KD 16 to KD 20 per square meter, and would reach KD 30 in prime locations in , whereas it may exceed this average to reach KD 40 at Al Salmiya area and KD 35 in Hawalli, and the average rent per square meter in the offices range between KD 5.5 to KD 6.5, and would reach KD 8 to in some distinct districts and relatively large space areas in Kuwait City. It would also reach KD 8 for the average square meter in some districts of Hawalli, Al Fahaheel, and Al Mangaf or even more, according to the location the quality of finishing, and the services rendered to the lessees and the visitors of the building.

42 43 KFH Local Real Estate Report 2014

Average Rent Trading of Investment Real Estate Properties Kuwait Governorates “Q3 – 2014” (in KD) Average Rent Trading of the Commercial Real-Estate Property in the Governorates of Kuwait “Q3 – 2014” (in KD) 2 Bedrooms, a Hall & Basement Ground Floor Mezzanine Offices 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & Hawally Governorate Bathroom (100 - 110) Areas Price Index Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m Average Rental Average Rental Average Rental Average Rental m M² M² M² M² Al Salmiya 340 - 310 370 - 350 425 - 380 500 - 480 Al Salmiya 18 - 12 40 - 25 12 8 - 7 --- Hawally 320 - 300 345 - 323 410 - 365 485 - 450 Hawally 16 - 10 35 - 25 12 8 - 7 --- Al Jabriya 350 - 320 355 - 335 425 - 380 500 - 480 Al Farwaniya 15 - 10 37 - 25 12 7 --- Al Shaab 350 - 320 360 - 350 450 - 425 550 - 500 Khaitan 14 - 9 35 - 25 10 7 --- 2 Bedrooms, a Hall & Al Mangaf - The Capital 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 15 - 8 30 - 25 10 8 - 7 --- Bathroom (100 - 110) Al Aziziyah Governorate Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m m Al Fahaheel 14 - 10 35 - 25 12 8 - 7 --- Sharq 350 - 330 415 - 390 465 - 435 585 - 510 The Basement as a Al Dajeej 4.5 - 5 12 - 9 6 - 5 --- Commercial Unit, Al Qibla 330 - 350 390 - 415 435 - 465 510 - 570 not a Store Eastern Al Muqawa 330 - 350 390 - 415 435 - 465 510 - 570 Commercial Kuwait City 14 - 12 30 - 20 10 8 - 6 Dasman 330 - 350 390 - 415 435 - 465 510 - 570 Complexes Administrative & Bneid Al Qar 330 - 350 390 - 415 450 - 425 500 - 580 Kuwait City 7 - 6 20 - 16 10 6.5 - 5.5 Commercial Towers 2 Bedrooms, a Hall & Farwaniya 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & Bathroom (100 - 110) Governorate Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m * Average rental values per square meter would be increased in the distinct sites and the modern buildings, in addition to the type of practiced activity m Khaitan 330 - 300 350 - 330 390 - 350 475- 430 Average Rent Trading of Industrial Plots in the Governorates of Kuwait “Q3 – 2014” (in KD) Al Farwaniya 330 - 300 330 - 350 390 - 350 430 -480 Jaleeb Al Shuyoukh 280 - 300 330 - 350 370 - 330 420 - 460 Basement Ground Floor Mezzanine Al Raqei 280 - 300 320 - 340 380 - 360 430 -475 Areas Average Rental Average Rental Average Rental Price Index Notes M² (Stores) M² (Exhibitions) M² (Offices) 2 Bedrooms, a Hall & Al Ahmadi 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & Bathroom (100 - 110) Al Shuwaikh Governorate Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m 4.5 - 3.5 40 - 14 6.5 - 5 Area per unit = 40 m --- m Industrial Do not include the rental Al Fintas 290 - 260 340 - 300 360 - 330 450 - 425 Al Rai 4 - 3.5 30 - 14 4 - 6 --- values in Mall Al Mahboula 260 - 290 300 - 340 330 - 360 425 - 450 *Upon allocating stores for Abu Halifa 260 - 290 300 - 340 330 - 360 425 - 450 the ground floor the price Sabhan 3 - 2.75 6.5 - 4 6.5 - 3 --- Al Mangaf 260 - 290 300 - 340 330 - 360 425 - 450 per M² ranges between KD 5 and KD 4 Al Fahaheel 260 - 290 300 - 340 330 - 360 425 - 450 *Price per rental M² = KD 8 - 2 Bedrooms, a Hall & 4 - 3.5 Mubarak Al Kabeer 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & Al Ardiya (Stores) 8 - 6.5 8 - 3.5 6 for the Exhibition 100 M at --- Bathroom (100 - 110) (As per Height) Governorate Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m the Ground Floor m Auto Shows & Restaurants Al Ahmadi East 3.75 18 - 12 4.5 - 4 --- Sabah Al Salem 300 - 285 350 - 325 380 - 350 480 - 450 are the highest rent 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & 2 Bedrooms, a Hall & Al Fahaheel 4 - 3.5 Al Jahra Governorate Bathroom (100 - 110) 20 - 14 6 - 4 As per the practiced activity --- Bathroom (60)m Bathroom (70 - 74)m Bathroom (80 - 85)m Industrial (As per Height) m Al Jahra 280 - 260 330 - 290 360 - 330 460 - 430 * Average rental values per square meter would be increased in the distinct sites and the modern buildings, in addition to the type of practiced activity

* The average rental values per square meter would be increased according to the height of the floor, and the demand increases on the stores where the net height of their ceiling ranges between 8 – 6 m.

44 45 KFH Local Real Estate Report 2014

Prices of Owned Investment Apartments Glossary Annex

Organi- A/P M² of Net Area ** A/P Description Net Area APT Market Value Building dedicated for These are standard buildings located in the areas with low density and dedicated for the Area zational of APT during Q3 Opinion of the Site of APT private housing residence of one family, which are constructed by individuals or the private sector by using From To From To 2014 architectural designs that differ according to the owner, or which lands were distributed by Bneid Al Qar Investment Arab Gulf 100 160,000 180,000 1,600 1,800 1,700 the State within the Programs of Housing Welfare by using unified or different architectural designs (Model). Bneid Al Qar Investment Main 72 88,000 92,000 1,222 1,278 1,250

General Average of The Capital Governorate 110,750 121,750 1,271 1,390 1,330 Building dedicated for That is the building consisting of a number of housing units (apartments – Villas – Duplex – Al Shaab Investment Arab Gulf 100 160,000 180,000 1,600 1,800 1,700 investment housing Studios), which are used for rent or ownership at all floors. Al Shaab Investment Main 72 90,000 95,000 1,250 1,319 1,285 Buildings of Private These are the buildings dedicated for providing educational services and could be for one Arab Gulf + Al Salmiya Investment 100 145,000 180,000 1,450 1,800 1,625 Schools educational stage or for several stages Blajat Hawally Investment Main 64 70,000 75,000 1,094 1,172 1,133 Buildings of Hotels These are the buildings dedicated for temporary residence for tourist and recreational Hawally Investment Internal 64 62,500 65,000 977 1,016 996 and Motels purposes and presenting general services to the guests General Average of Hawally Governorate 94,202 103,883 1,139 1,249 1,194 Commercial Building That is the building that permits the use of the basement and the ground floor and the Sabah Al Salem Investment Main 72 66,000 72,000 917 1,000 958 (Mall) Mezzanine for commercial shops, it could be designed as closely attached shops or separate General Average of Mubarak Al Kabeer Governorate 77,667 85,667 943 1,034 988 shops which could be directly served on corridors on the commercial street, or in the form of cabins. The recurrent floors could be used as offices or for any other purposes. Al Farwaniya Investment Main 80 75,000 80,000 938 1,000 969

General Average of Al Farwaniya Governorate 77,667 83,333 897.5 962.5 930 Industrial Facilities These are the buildings dedicated for industrial purposes or for warehouses or for service or Al Fintas Investment Main 72 62,000 65,000 861 903 882 craft purposes Al Fintas Investment Internal 72 50,000 55,000 694 764 729 Residential These are the buildings dedicated for the investment housing, and such buildings consist Al Mahboula Investment Sea Front 100 130,000 145,000 1,300 1,450 1,375 Complexes outside & of several housing units (apartments or villas or studios or Duplex), and they are being used Al Mahboula Investment Internal 100 75,000 85,000 750 850 800 inside Kuwait City for rental or ownership purposes at all floors, and the buildings of the Complex could be closely attached as one building or as separate buildings provided that the area of the land Al Mahboula Investment Main 72 62,000 65,000 861 903 882 on which the Complex is constructed should not be less than 3000 square meters, given that Abu Halifa Investment Sea Front 95 130,000 145,000 1,368 1,526 1,447 the areas deducted for the vision angles should be calculated within the area required for the Abu Halifa Investment Internal 100 75,000 85,000 750 850 800 construction of the Complex. Abu Halifa Investment Main 72 62,000 65,000 861 903 882 Building on various Those mean the buildings constructed on the Coastline, and made by the individuals on their Al Mangaf Investment Sea Front 95 130,000 145,000 1,368 1,526 1,447 areas on the Coastline private properties. Al Mangaf Investment Internal 100 75,000 85,000 750 850 800 Al Mangaf Investment Main 72 62,000 65,000 861 903 882 Buildings dedicated The buildings which are being used to grow the Seedlings of all kinds, sale and display of for Plant Nurseries plants and flowers, and arrange and maintain the gardens and the agricultural products, Al Fahaheel Investment Main 72 62,000 72,000 813 900 856 along with a store for the seeds and agricultural requirements, in addition to administrative General Average of Al Ahmadi Governorate 75,450 83,600 878.2 971.0 925 offices.

* It is worth mentioning that: This report monitors the general trends of trading the prices at the real estate market in Kuwait. However, the method used Private Marine These are buildings which are constructed outside the limits of General System in accordance by the Evaluation and Studies Department at “KFH” depends on studying every real estate building separately, and studying its characteristics and Chalets with rental contracts on the land of State for entertainment purposes defining its rental value, as well as its returns, in order to adopt a special recommendation and a fair evaluation of each property. Private Hospitals These are the buildings dedicated for providing medical services (Outpatient Clinics – Operations Theater – Laboratories – Rooms and Suites for the patients), and their services could be general or specialized

46 47 KFH Local Real Estate Report 2014

Units of measurement:

Length: • International unit of length is the meter (m) . • (1 m = 10 decimeter = 100 cm = 1000 mm) . • yard = 3 feet = 0.9144 m . • foot = 12 inches = 30.48 cm = 0.3048 m . • inch = 2.54 cm = 0.0254 m . • kilometer = 0.6214 mile = 1000 m . • land mile = 1.6093 kilometers = 1609.0 m . • nautical mile = 6080 feet = 1.853 kilometers = 1853 . • League = 3 miles = 4.8281 kilometers = 4828 m . • Dau = 2 meters approximately • tall = 182.88 cm = 1.8288 m . • Arm = 51 cm = 0.51 m . • Spam = 22.86 cm = 0.0229 m . • meter = 1.0936 yards = 3.2808 ft = 39.37 inches.

Area: • The international unit for measuring space is per square meter (m 2) . • hectare = 10 acres = 2.471 acres = 10,000 m 2 . • Acre = 4046.8 m 2 . • dunam = 1000 m 2 . • square meter = 10,764 foot

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