Real Estate in Kuwait enters new phase as land hoarding curbed

KUWAIT CITY, April 30: As the government moves to redraw the map for using undeveloped land through inventory and classification, a new phase is emerging in the Kuwaiti real estate market. This phase is marked by a shift away from land hoarding and speculation toward utilizing land as a productive economic asset that supports growth and diversifies income sources.

Between land classification and new legislation, experts have indicated that mixed-use projects, logistics, and housing are among the main drivers of the next phase, supported by regulatory measures aimed at encouraging landowners to develop or sell their property. Former Municipal Council member Hamoud Oqla Al-Enezi explained that the government’s move to inventory undeveloped land represents a pivotal turning point in the trajectory of real estate and economic development.

The true value does not lie in merely selling land, but in transforming it into a productive economic asset capable of generating sustainable returns. The next phase will witness a rise in mixed-use projects that combine residential, service, retail, office, and public facilities, as these projects are more capable of generating added value compared to single-use developments. The residential sector will remain a top priority due to increasing demand, with approximately 105,000 housing applications currently pending, a number expected to rise to nearly 197,000 by 2035.

The success of land allocation depends on the ability of the relevant authorities to link it to clear and measurable economic outcomes, such as the number of jobs created, the size of investments, and operational returns. Al-Enezi cautioned against the process becoming merely a real estate recycling scheme or new forms of speculation that do not add real value to the economy. He highlighted that real estate-related sectors capable of supporting non-oil GDP include logistics, warehousing, light industries, craft zones, tourism and entertainment, education, and healthcare, in addition to waterfront projects and modern markets, in line with the objectives of New Kuwait 2035 vision.

Al-Enezi indicated that the implementation of Law No. 126/2023, which prohibits the monopolization of vacant land and imposes fees from March 2026, will significantly change landowners’ attitude, pushing them towards two clear economic options - development or sale, instead of holding land without development. He predicted that the next three years will witness a shift in investor trend, with a decline in the role of speculators and a rise in the role of long-term investors, along with a growing tendency among landowners to enter into partnerships with developers or restructure their real estate portfolios. Al-Enezi indicated that there are several challenges, particularly lengthy bureaucratic procedures, the multiplicity of stakeholders, the slow pace of landuse changes, and high financing costs. He emphasized that public-private partnerships represent the ideal model for developing large-scale land projects, as they strike a balance between state ownership of assets and the private sector’s capacity for financing and execution.

Al-Enezi stressed that the success of the next phase will not be measured by the volume of transactions, but rather by the ability of these projects to create real job opportunities, increase non-oil GDP, and transform land from static assets into active drivers of the national economy. For his part, the CEO of Reem Real Estate Company and real estate expert Khaled Ali Al-Saghir stated that this step establishes a new phase based on planning that rely on accurate data and a professional database rather than individual interpretations. He explained that building an accurate and updated database of land, and classifying it according to its uses, represents the first pillar of any successful development project.

The quality of information will be directly refl ected in the efficiency of investment and real estate decisions, whether at the state level or in the private sector. The next phase will witness the emergence of new investment sectors, primarily warehousing and logistics services, given the increasing demand for storage space resulting from regional changes, disruptions in some supply chains, and regulatory decisions that have closed a number of unlicensed warehouses.

The logistics sector is not merely a traditional real estate activity, but rather the lifeblood of the economic cycle, as it is directly linked to supply chains, the storage of food, commodities, and raw materials, and the maintenance of strategic reserves of these goods. Land development must be part of a comprehensive vision that includes infrastructure development, road and transportation networks, as well as tourism and industrial projects. Real estate development cannot be separated from other economic sectors; rather, it is an integral part of a cohesive system that contributes to supporting non-oil GDP. Al-Saghir emphasized that the timing of these measures, along with the implementation of the law preventing the monopolization of vacant land, represents a significant reform initiative.

However, he said it still requires further development through a package of complementary legislation and decisions. He commended the Cabinet’s recent decision to form a temporary committee to study the shortcomings and implications of implementing Law No. 126/2023, which combats the monopolization of vacant land. Al-Saghir explained that the real estate market needs to move beyond its comfort zone by adopting new regulatory tools that enhance transparency and curb negative practices. Recent decisions regulating real estate advertisements and updating municipal requirements have contributed to improving the business environment and redefining market practices.

He called for the establishment of a unified umbrella organization or real estate authority encompassing all relevant entities, including Kuwait Municipality, the Ministry of Commerce and Industry, the Real Estate Registration Department, the Kuwait Fire Force (KFF), the Ministry of Electricity, Water and Renewable Energy, and other related bodies, in order to streamline procedures. Al-Saghir stressed that relying on existing tools will not address the current backlog in the housing issue due to continuously rising demand. He highlighted that the current number of housing applications is close to 100,000, with approximately 8,000 new applications added annually, meaning the challenge is expected to double in the coming years. Al-Saghir pointed out that addressing this crisis requires adopting a real partnership model with the private sector, both in developing housing projects and in providing innovative financing solutions.

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