Kuwait’s Retail Sector Continues to Experience High Occupancy Levels of 93%
Kuwait’s retail demand remains split between popular community centres that have a focus on F&B concepts as well as larger scale regional shopping centres, with the later continuing to demonstrate very high occupancy rates and stable leasing rates - according to a new report by the global real estate advisory firm, CBRE. The Market Snapshot also reveals that development activity across the retail sector remains buoyant with approximately 167,000 square metres of gross leasable area (GLA) set to be handed over between 2020 and 2021.
CBRE research indicates that in Q2 2019 there is 702,000 square metres of shopping mall GLA in the Kuwait real estate market which is categorized as being either regional or super regional in scale. This is across a total of eight existing properties, with an additional three pipeline development projects that are currently under construction and planned for completion by 2021.
While supply and demand dynamics look positive for Kuwait’s retail sector in general, this should be tempered with a degree of caution by developers when taking into consideration wider macro-economic conditions.
James Lynn, Head of Strategic Advisory at CBRE in the Middle East, said: “The changing face of traditional retail, driven by the global growth of e-commerce, also needs to be carefully managed by owners, developers and property managers in Kuwait. New types of tenants are starting to consider space in shopping malls, with corporate businesses leading this trend, drawn by the appeal of convenient F&B, leisure and entertainment options for their employees”.
Retail GLA per capita in Kuwait is currently 0.22 square metres which ranks the country third in the GCC. In addition, average mall occupancy levels are seen to be strong at 93% across existing stock which indicates an opportunity for customer, as well as retailer-led, demand growth over the short to medium term.
Future regional and super regional retail projects are designed to be consistently larger in scale than existing comparable properties. In 2019, 50% of operating supply are seen to have a GLA of between 10,000 and 40,000 square metres.
“This is indicative of an increased focus on alternative leisure and entertainment in new properties as these concepts typically occupy larger leasable spaces than traditional apparel fashion or F&B retailers” James Lynn concluded.
CB Richard Ellis Group CBRE
CB Richard Ellis Group, Inc., a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services firm (in terms of 2009 revenue).
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