KIB: Kuwait City is attractive for investment in administrative and commercial real estate
Kuwait International Bank (KIB) has confirmed that the administrative and commercial real estate market in Kuwait City continues to maintain its high investment appeal, supported by limited supply and sustained demand for prime locations with active economic activity, particularly on main streets. This trend reinforces the stability of real estate asset values and underscores the robust fundamentals underpinning this sector.
In this context, Mishaari Al-Boulian, Head of the Real Estate Valuation Department at KIB, stated that prices for land designated for administrative and commercial use, with an area of 500 square meters, vary according to location and the permitted building ratio. The price per square meter of vacant land ranges between 7,000 and 13,750 Kuwaiti dinars on the capital’s most prominent streets, including Ahmad Al-Jaber, Fahad Al-Salem, Jaber Al-Mubarak, Mubarak Al-Kabeer, and Abdullah Al-Mubarak, with higher prices recorded for properties featuring high building ratios and strategic locations.
He added that investment return rates in these areas currently range between 6% and 7.25%, varying based on achieved rental levels, building quality, availability of parking spaces, and the suitability of the property for various administrative and commercial activities.
Al-Boulian noted that Fahad Al-Salem Street continues to attract investors due to its strategic location and its hosting of numerous financial institutions and major companies, while Ahmad Al-Jaber, Jaber Al-Mubarak, and Mubarak Al-Kabeer streets maintain strong demand levels owing to the continued administrative and commercial activity within them.
He clarified that the market value of administrative and commercial land depends not only on location and building ratios but is also influenced by several key factors, including the balance of supply and demand in the market, building occupancy rates, the nature of prevailing economic activities in the area, as well as the overall state of the local economy and profit margins, all of which play a crucial role in guiding investors’ decisions.
Al-Boulian emphasized that the availability of parking spaces has become a fundamental factor in the success of administrative and commercial real estate and its ability to attract tenants and investors, given its direct impact on occupancy rates, rental values, and ease of access to the property.
He added that state initiatives implemented in partnership with the private sector to develop multi-purpose parking facilities in vital areas contribute to supporting economic activity, improving infrastructure, and enhancing the competitiveness of Kuwait City as a major financial and commercial hub.
He also pointed out that the market is currently witnessing a shift in tenant preferences, with growing demand for small and medium-sized administrative offices ranging between 30 and 50 square meters. This trend is driven by startups, entrepreneurs, and freelancers seeking to optimize operational costs and utilize more efficient spaces. This shift has positively reflected on the occupancy rates of administrative and commercial buildings, prompting some property owners to subdivide office spaces to align with market needs, thereby achieving better investment returns.
Al-Boulian concluded that administrative and commercial properties with prime locations and good operational specifications are capable of maintaining their market value and delivering stable long-term returns, even during periods of change or volatility in the real estate market.
Al-Bouali concluded his statement by emphasizing that the administrative and commercial real estate sector in Kuwait City continues to benefit from strong fundamentals that underpin its stability and sustained growth, leveraging the capital’s status as a leading financial and commercial hub in Kuwait, thereby enhancing the attractiveness of investing in high-quality administrative and commercial real estate assets.
