Thursday 11 August 2022

KIA to invest $3.6bn in Kuwait property market

Kuwait, March 23, 2011

Kuwait Investment Authority (KIA), the country's sovereign wealth fund, said it will launch a real estate portfolio worth KD1 billion ($3.6 billion) to invest in the local market.

'The real estate portfolio aims to achieve good returns on mid-term and long-term, and will benefit from the steep plunge in real estate,' KIA said in a statement on Wednesday on the state news agency KUNA.

Kuwait Finance House, the country's biggest Islamic lender, will initially manage the portfolio KIA said, adding that the portfolio would not invest in residential properties.

'Such huge liquidity in the real estate market will reflect positively on local investment and real estate firms, and the country's bourse as well,' Tawfiq al-Jarrah, the chairman of Kuwait Real Estate Union told Reuters on Wednesday.

Jarrah said Kuwait's real estate market is comprised of about 811,000 sq m, 55 per cent of which is occupied. He added the average price for a square meter in the country is KD6.750 ($24.39).

In 2008, Kuwait's government assigned KIA to set up a long-term investment portfolio in cooperation with other government institutions to invest in the Kuwait Stock Exchange, the Arab world's second biggest bourse.

Kuwait's Finance Minister Mustapha al-Shamali had said that the bourse fund would invest at least KD1.5 billion.

The fund had been set up as part of measures taken by the Opec member to boost confidence in the stock market and banking system, hit by concerns investment firms might run into trouble due to their exposures to international markets due to the global financial crisis.

Maytham al-Shakhs, the head of investments at Global Investment House, saw KIA's investment as a surprising step and a big mistake.

'It's a big mistake that the country invests in real estate sector because it will cause a huge increase in prices... It would have been better to support other sectors like the investment... and services sectors,' he said. – Reuters

Tags: real estate | Kuwait Investment Authority | KIA | KUNA |

More Construction & Real Estate Stories

calendarCalendar of Events