Detailed research reports covering real estate sector in the GCC
Real Estate Market Commentary - 17 to 23 June 2012
Jun 24, 2012
Kuwait Financial Centre "Markaz"
MENA REAL ESTATE RESEARCH
Research Highlights: A weekly market commentary
Real Estate Market Commentary
17-Jun-12 to 23-Jun-12
Kuwait: Transaction statistics from the MOJ indicated a 33.5% Y-o-Y increase in the number of real estate transactions during Jan-May-12, while value transacted grew 10.2% Y-o-Y. In May-12, transaction number of transactions declined 35.8% Y-o-Y and 56% M-o-M. Value transacted declined at a lower rate of 24.6% Y-o-Y and 45.1% M-o-M. Separately, it was reported that administrative procedures for allocation of 7,400 private residential units (600 sq.m each) west of Abdullah AlMubarak and, 52,625 units north of Subbiya (400 sq. m each) have been completed. It was also further mentioned that, procedures for an additional allocation of 48,000 private residential units were underway. Dubai: It was reported that credit rating agency Fitch noted stability in the industrial and office rents in JAFZ and expects rental stability to flow from a high land lease renewal rate, as c.80% of the companies have been operating since Jan 2007 . Fitch also observed high occupancy rates in the free zone, with 79% of leasable land, 90% of warehouses, 78% of offices and 88% of onsite residential accommodation being occupied as of Dec-11. Although the agency expects the free zone's business to be less volatile compared to the overall office market in the emirate, they expect the short-term nature of rental contracts at JAFZ, with c.60% of the rents contracted for one year and, oncoming supply of rental properties to have an impact on the free zone's earnings. UAE: Institute of International Finance (IIF), estimates real GDP growth to slow down to 2.8% Y-o-Y in 2012 and 3.2% in 2013 from 4.2% in 2011, primarily due to steep decline in growth of crude oil output. While hydrocarbon real GDP growth is expected to decelerate to 2.4% in 2012 and 1.7% in 2013 from 6.8% in 2011, continued growth in the nonhydrocarbon sector (3% in 2012 and 4% in 2013 against 3.1% in 2011), particularly in tourism, trade and logistics, is expected to lead GDP growth. IIF`s GDP growth projections are higher than those expected by the IMF earlier (2.3% in 2012 and 2.8% in 2013). Also, IIF confirmed earlier released inflation forecasts of below 1% for the third consecutive year in 2012 (at 0.7% Y-o-Y), mainly contributed by declining rentals in an oversupplied housing market. Inflation is expected to edge up to 1.5% Y-o-Y in 2013. IIF's inflation estimates are lower than those of IMF (1.5% in 2012 & 1.7% in 2013). Qatar: NAI Qatar in its latest monthly release indicated that residential rentals remained largely stable on M-o-M basis. Rentals for furnished units increased 0.5% M-o-M, while those for unfurnished units edged down 2.1% M-o-M. On Y-o-Y basis, a prominent downtrend in rentals could be noted, barring those for three-bedroom furnished and onebedroom unfurnished apartments. Furnished villas led the decline with a 6.9% Y-o-Y correction. On the office front, the consultants highlighted a flat trend on a M-o-M basis. On a Y-o-Y basis, the average rate for grade A office space was QAR157 /Sqm (+3.3%), with the highest rate in new CBD at QAR185 /Sqm (-8.4%). The average rate for grade B office space was QAR105 /Sqm(+2.9%). Egypt: According to Central Bank of Egypt's monthly release for May12, overall prices decreased 0.2% M-o-M in May-12, led by a 0.7% M-oM decline in the housing component. On Y-o-Y basis, for of May-12, inflation in overall prices stood at 8.3%, while the housing component inflation was 7.2%, as both witnessed lowest Y-o-Y increases YTD.
Contents Market Commentary Charts to Note Activity Monitor: Dubai, Kuwait, Riyadh - KSA, Dammam KSA Qatar Markaz Research is available on: Bloomberg - Type "MRKZ" Thomson Research, Reuters Knowledge ReutersRealEstate.com Nooz Zawya Investor ISI Emerging markets
Thomas K. Mathew Senior Research Analyst +965 2224 8000 Extn: 2712 email@example.com Venkat Ramadoss ACA, CFA Manager +965 2224 8548 firstname.lastname@example.org Bassam N. Al-Othman Executive Vice President +965 2224 8011 email@example.com
Developments sourced from various sources including news portals like Gulfbase, Zawya, Reuters, Bloomberg, Trade Arabia, Business 24/7, Arabian Business, The Peninsula, Gulf News, Property Wire, Khaleej Times, Saudi Gazette, KUNA etc and also from published reports of real estate brokers and investment research houses.
MENA REAL ESTATE RESEARCH Charts to note
Chart 1: Real Estate Transactions Market Comparison May-12
12 9 7.8
Vol - 41.4% Value - 9.8%
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