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Saturday, September 13, 2025
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Kuwait Market jitters as MoCI halts plot transfers

publish time

13/09/2025

publish time

13/09/2025

Kuwait Market jitters as MoCI halts plot transfers

KUWAIT CITY, Sept 13: In what has been described as a “reformist” move, the Ministry of Commerce and Industry has suspended the transfer of licenses and contracts for industrial, craft, commercial, and service plots throughout Kuwait. The decision aims to reorganize the market following years of unregulated and chaotic exploitation. It has sparked widespread debate and drawn mixed reactions from experts and business leaders. Abdullah Waleed Al-Hamad, CEO of Construction Contracting Company, described the decision as a long-overdue reform step. While acknowledging that the move may cause temporary setbacks for some investors,

Al-Hamad emphasized that it will put an end to the misuse of designated plots for unrelated commercial activities and redirect them toward their original intended purposes. He noted that the market has experienced an unjustified rental bubble in recent years, with some landlords paying the state around KD 6 per square meter annually and then subleasing the same space for KD 10 to KD 15 per month. Al-Hamad recommended that the decision be further strengthened by adjusting state fees to better reflect actual market values and linking them to a regulatory mechanism that ensures plots are used strictly for their designated purposes. He also proposed offering alternative plots through a competitive allocation system and establishing a permanent oversight unit, electronically linked to relevant authorities, to ensure ongoing compliance.

Meanwhile, economic and real estate expert Qais Al-Ghanim emphasized that the main issue with the decision lies in the lack of transparency surrounding its announcement, as it was issued without a clear explanation of its rationale or a defined timeframe. He explained that any economic decision lacking clarity in its reasoning and details is likely to create more negative than positive outcomes, as investors rely on transparency to make informed investment and financing decisions.

Banks have been affected by the ambiguity, as they require accurate information about the market value of buildings and plots to assess and determine appropriate financing for clients. The sudden halt of sales and purchases, without adequate explanation, has created a state of uncertainty in the market, prompting some investors to delay their decisions or temporarily withdraw altogether. Al-Ghanim stressed the importance of accompanying such decisions with a comprehensive media and awareness campaign that clearly explains the reasons behind the move, outlines its expected benefits, and specifies the intended timeframe. Furthermore, real estate expert Ahmed Al-Duwaihees said the decision will have direct repercussions on buying and selling activity, particularly since investors require a clear vision before making any new financial commitments. Al-Duwaihees explained that while industrial plots are state-owned and the government has every right to regulate their use and reconsider how they are allocated to serve the public interest, investors still need a clear understanding of the implementation mechanism. Any economic decision of this scale requires a well-defined plan and gradual rollout to avoid freezing the market or discouraging investors from entering into new contracts, both of which could negatively affect industrial activity and disrupt ongoing investments. The success of the decision hinges primarily on how quickly the relevant authorities announce its full details and implementation mechanisms, including the expected duration of the suspension and the short-term and long-term goals the policy aims to achieve.

By Marwa Al-Bahrawi
Al-Seyassah/Arab Times Staff