Discover the key aspects and opportunities in Kuwait's retail market as we present a comprehensive analysis tailored for investors.
Retail Property Types in Kuwait
Retail Malls: Properties with high leasable area (more than 10,000 m2) and multiple anchor tenants (e.g., The Avenue, 360 Mall).
Retail Plazas: Mid-size leasable area properties (less than 10,000 m2) with a few anchor tenants (e.g., Al Hamra, Sahia Complex).
F&B Plaza: Properties on the sea-side primarily for F&B and few other tenants (e.g., The Lake, Sidra).
Mixed Use Properties: Properties with retail units on lower floors and office/other units on higher floors, mostly in Kuwait City (e.g., Dar Al Awadi, Crystal Tower, Yaal Tower).
Other Properties: Includes Coops, souqs, commercial properties in various areas (e.g., Shuwaikh, Al Rai, Dajeej, Qurain, Investment Complexes), excluding Souq Sharq in Kuwait City and high street retail properties.
Retail Malls vs Plazas
Retail Malls:
Market Share: Retail Malls command a 19% share of the market.
Leasable Area: These properties boast an impressive 1.10 million square meters of leasable space.
Notable Additions: In 2023, the market saw significant growth with the introduction of Tamdeen Group's Khiran Mall and The Warehouse Mall.
Anchor Tenants: Retail Malls typically attract multiple anchor tenants, making them retail destinations in their own right.
Retail Plazas:
Market Share: Retail Plazas hold a 6% share of the market.
Leasable Area: This category features mid-sized leasable areas, totaling 328,537 square meters of Gross Leasable Area (GLA).
Unique Experience: Retail Plazas cater to a different audience, offering a more intimate shopping experience with fewer anchor tenants.
Lease Rate Dynamics and Trends
Lease Rate Dynamics and Trends in Kuwait's retail space sector are essential factors that provide insights into the overall health and competitiveness of the market. Let's delve into the lease rate dynamics and trends, as outlined in the Q4 2023 report:
Occupancy Ratio Declined but Occupied Space Increased:
In 2023, the occupancy ratio in the retail space sector stood at 81.6%, which, while slightly below expectations, still reflects a healthy market.
This calculation takes into account new retail mall additions such as Tamdeen Group's Khiran Mall and The Warehouse, which contributed to the growth in occupied space.
The retail space inventory grew from 1,492,465 square meters in 2022 to 1,637,872 square meters in 2023, marking an increase of 145,406 square meters.
Average Lease Rate Trend:
The average lease rate in 2023 experienced a marginal decrease, going from KD 20.8 per square meter in 2022 to KD 20.4 per square meter in 2023.
This trend suggests a relatively stable leasing market, with competitive rates remaining attractive to retailers and investors.
Supply Pipeline and Future Projections:
The supply pipeline in Kuwait's retail space sector is largely predictable, with both confirmed and speculative projects on the horizon.
Confirmed projects include recent openings like Tamdeen Group's Khiran Mall and The Warehouse Mall, as well as upcoming developments in Egaila and Tamdeen Square Phase 2. Construction updates in Jaber Al Ahmed City by Mabanee and Alargan are also noteworthy.
Speculative projects, while promising, come with uncertain timelines. These projects encompass Kuwait Motor City, Mabanee's project in Salmiya, and others.
Lease Rate Dynamics and Trends
Projected Trend of Occupancy and Lease Rate in Kuwait
Average Lease Rate Trend:
The average lease rate in 2023 experienced a marginal decrease, going from KD 20.8 per square meter in 2022 to KD 20.4 per square meter in 2023.
This trend suggests a relatively stable leasing market, with competitive rates remaining attractive to retailers and investors.
Supply Pipeline and Future Projections:
Kuwait's retail space sector benefits from a relatively predictable supply pipeline, encompassing both confirmed and speculative projects.
Confirmed projects include recent openings like Tamdeen Group's Khiran Mall and The Warehouse Mall, as well as upcoming developments in Egaila and Tamdeen Square Phase 2. Construction updates in Jaber Al Ahmed City by Mabanee and Alargan are also noteworthy.
Speculative projects, while promising, come with uncertain timelines, featuring developments such as Kuwait Motor City and Mabanee's project in Salmiya, among others.
Projected Trends:
Looking ahead, the retail space inventory is expected to continue growing, with a projected total of 1.91 million square meters by 2025.
Occupancy projections indicate a steady increase, with an estimated occupancy ratio of around 84% by 2025, and a minimum of 81.0% in 2024.
The lease rate trend is expected to see a slight decline, with the average lease rate projected to drop from KD 20.4 in 2023 to KD 19.8 in 2025.
Key Retail Groups' Market Influence
Major Players: Prominent retail groups in Kuwait include Alshaya Group, Majid Al Futtaim, Landmark Group, and others.
Market Share Total: Collectively, these large retail groups account for a substantial 36.7% of the market.
Alshaya Group:
Alshaya Group is a prominent player with a diverse portfolio of brands across various sectors, including fashion, food, and hospitality.
Their extensive presence in Kuwait and the broader Middle East region significantly impacts the retail space sector.
Majid Al Futtaim:
Majid Al Futtaim is recognized for its investments in shopping malls and retail outlets, with a strong focus on creating integrated retail experiences.
Their presence enhances the overall retail landscape and contributes to the sector's growth.
Landmark Group:
Landmark Group is known for its retail concepts, including fashion, home, and electronics brands.
Their influence extends to Kuwait, making them a key player in shaping the retail market.
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