markaz residential report 2013 - 2014

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Kuwait Financial Centre MarkazMENA REAL ESTATE RESEARCH

KSA Outlook 2013 & 14Undersupply in residential to persistKSA RE fundamentals expats to grow at 1.5% CAGR

KSAs real GDP growth is expected to grow by 6.0% & 4.2% in 2012 &13, with non-oil GDP set to grow at 6.5% and 5.6% respectively. Weforecast Saudi & expat population to grow at a CAGR of 2.0% & 1.5%respectively over 2011-14, as against government targets of 0.2%growth in non- Saudi population, as we expect KSAs plan to employSaudi nationals in the non-oil private sector to be a gradual process.

KSA aggregate residential- near term undersupply

We estimate the growth in KSAs population to lead to an annualresidential demand of 163,500 units. Annual supply on the other handis likely to be lower by c.38,500 units, even after factoring in plannedofficial interventions, which underpins our belief that the residentialmarket should remain undersupplied in the near term.

Cities residential outlook different tenor; same story thoughRiyadh: The Riyadh city residential market is forecasted to stayundersupplied in 2013 & 14, primarily due to the existing undersupplyin middle & lower middle income housing (2012 undersupply: 44,400units). We expect the incremental demand to also be higher thansupply by c.11,800-13,200 units over 2013 & 14, as most of theincoming supply is not expected to cater to the middle and lowermiddle income Saudi households. We expect rentals to surge from aninflux of expats, while higher investment activity from both Saudi &non Saudi households leads to higher prices Jeddah: The

November 2012Research Highlights:

A study to analyze key emergingresidential trends in KSA andprovide an outlook for 2013 &2014

Markaz Research is availableon:Bloomberg -Type MRKZ Thomson Research,Reuters Knowledge

NoozZawya InvestorISI Emerging markets


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non Saudi households leads to higher prices Jeddah: The

MENA REAL ESTATE RESEARCHNovember 2012

KSA real estate fundamentals

KSAs real GDP growth is forecasted to grow by 6.0% & 4.2% in 2012& 13, with non-oil GDP set to grow at 6.5% and 5.6% respectively.Non-oil GDP in turn is expected to grow, as a result of a 7.0% CAGRin the non-oil private sector over 2012 & 13, while the non-oil publicsector grows by a lower 4.2% over the same period. Real GDPrecovered and grew by an avg. 6.1% over 2010 & 11(2009: 0.1%), asnon-oil sectors contributed to 4.5% of the growth in 2010 and 5.9% in2011.

Exhibit-1: Economic growth trends

Source: IMF, Markaz analysis

KSA authorities in their effort to widen the economic base had laidi d l t t t i it 9th D l t Pl (DP) f

Real non-oil private sectorto grow at 7.0% CAGRover 2012 & 13


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intergenerational equity (share of resources and assets that belong tofuture generations) by about 10% of non-oil GDP, which it expects to

be on the higher end of the sustainability range. Further, IIF estimatesthat improvement in productivity, and much higher private sectorinvestment (2011: 14% of GDP), would be required to sustain non-oilGDP growth of 6%.

Expatriate population to grow higher than targeted

While growth in Saudi population is driven by demographic factors,expatriate population growth is a function of economic growth andemployment policies of the government. The 9th DP enumerates that,Saudi national population in KSA would grow by c.2.0% over 2010-15,while it pegs the target for expats growth at 0.99%, far lowercompared to the 5.39% growth achieved during 2004-2010. Also theSaudization programme targets to increase the share of Saudiworkforce in total labour force from 47.9% in 2009 to c.53.6% in 2014by providing 1.1 Mn jobs to labour market entrants. Also the DP aimsto reduce the unemployment rate amongst the national workforcefrom c.9.6% in 2009 to about 5.5% by the end of the Plan in 2014. As

of 2011, the overall unemployment amongst Saudi nationals grew to11%, with youth unemployment (20-29 years of age) much higher atc.25%. As of 2010, the number of Saudi nationals in the public sectoremployed was c. 12.1%, while only 10.4% of the private sectorworkforce was Saudi nationals.

We consider the government initiatives to increase Saudi nationalemployment in the private sector, implemented with due importanceso far, to have limited impact on expatriate population growth in the

near term Substantially higher public sector remuneration deters

Government targets 2010-15 Non-Saudi populationgrowth of 0.99%


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reaching implications on our residential and office real estateforecasts.

Exhibit-3: Diversion of labor into Government & Oil Sectors

Source: CDSI, Markaz analysis


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KSA residential Undersupply to persist

The KSA residential sector is faced with severe shortage of supply ofhousing units; evident from the increasing household size trends from2004-10. The average household size increased from 5.48 in 2004 to5.84 in 2010, as the number of households grew 16.3% from c.4.0 Mnhouseholds to 4.6 Mn households. The increase in overall householdsize was largely attributed to the increase in Saudi household sizewhich grew from 5.98 to 6.12 in the same period, while the averageexpat household size grew from 5.00 to 5.32 as well. Taking the 2004-10 trends into consideration, the overall household size is expected to

increase to 5.94 in 2014, if left without any official intervention.

The National Housing strategy (NHS) for KSA was put in place amongother initiatives for alleviating the existing housing shortage andunbalanced housing distribution in KSA, especially for the low tomiddle income households. The NHS along with the 9th DP, aim tobring down the overall household size to c.5.7, which would entailsupply addition of 200,000 units annually. The other implicit initiativesof the KSA government are targeted towards reducing the

infrastructure gap, curbing significant price & rent increases forhousing units and crowding of households (more than one householdliving in a housing unit). Furthermore the KSA government hasallocated USD 67 Bn for the construction of 500,000 housing unitsthrough its Ministry of housing (MOH) as part of its social welfareschemes.

Exhibit-4: 9th DP targeted housing demand (2010-14)

Saudi household size inKSA grew from 5.98 to6.12 over 2004-10

NHS targets overallhousehold size to declinefrom 5.84 in 2010 to 5.7in 2014


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implementation run rates. A faster implementation run rate of MOHsupply is expected to lower prices and lead to higher demand during

the period, while any delay is expected to result in a push out of thetargeted household size reduction.

The NHS lays out three demand scenarios for housing take up:

Upper bound: In this scenario, NHS expects 257,100 units ofresidential demand, as non-Saudi population CAGR continues

at 5.39%, while the household size of Saudi nationals is

expected to decline by the construction of 350,000 units by

2015.

Lower bound: Saudization initiatives are successful, leading toa nonSaudi population CAGR of less than 1% over 2010-15,

and non MOH housing units are constructed. This demand

estimate is expected to result in 115,400 units of annual

residential demand.

Intermediate scenarios: These intermediate scenarios assumea non-Saudi population CAGR of c.1.5%, with MOHconstruction of 250,000-350,000 units by 2015, and are

expected to result in 160,000-180,000 annual housing units of

demand over the period.

Exhibit-5: NHS annual construction demand scenarios

Demand estimates of163,500 residential perannum over 2010-15


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effect of a 40% private sector crowding out phenomenon, which is thelower construction from the private sector, as a result of supply

adjustments from MOH housing units being constructed. We expectthis supply estimate to be more on the aggressive side, as we do notexpect a reduction on non-Saudi population growth of this magnitude.Therefore we conclude that, despite efforts to stabilize theundersupply situation in KSA, from MOH housing units addition andother policy initiatives, we expect the overall undersupply in theresidential market to persist in the medium term until the full effectsof Saudization and supply of MOH addition are realized.

Exhibit-6: KSA annual supply addition

Source: NHS Markaz analysis

Annual supply to remainc.23% lower thandemand over 2010-15 inspite of MOH addition


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Further, our analysis suggests that the two components of real estatecapital formation: 1)Non-oil private real estate GFCF of Real Estate

GFCF and 2) Non-oil private residential real estate GFCF of Real EstateGFCF showed a slowing trend from 2001-2011 (Refer Exhibit 3). Overthe period, private real estate GFCF as a % of total real Estate GFCFdecreased from 77.3% to 32.8%. Moreover, private residential realestate GFCF as a % of real estate GFCF also declined from 45.6% to18.8%, showing a clear trend of underinvestment in residential realestate.

Mortgage law approved finer details to decide impact

In our 2009 KSA Residential Real Estate Report, we had mentionedthat the younger generation of KSA, in the age group of 20-35, wasdeprived of real estate ownership due to the lack of supportive homefinancing terms, and that once the mortgage law is passed, thepotential for residential real estate in KSA would increase significantlythereby turning around the waning investment trend. Moreover, lackof financing is also a key impediment to alleviate the mid incomehousing undersupply. The mortgage law was passed by the Council of

Ministers on 2-Jul-12, which includes the enforcement of mortgagecontracts, mortgage registration and real estate financing companieslaws. On 19Nov-12, SAMA released the draft versions of implementingregulation of 1) Real estate finance, 2) Financial lease law and 3) Lawon supervision of finance companies. Central to the implementationstrategy, was the setting up of the Real Estate RefinancingCorporationto provide a regulated secondary market and liquidity forreal estate financing. The Real Estate Refinancing Corp. would haveminimum capital of SAR 2 Bn and would be responsible for issuing

Islamic bonds o sec ities backed b mo tgages o eal estate Real

Mortgage law impact ondemand to depend on thefiner details of the passedlaw yet to be released


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Riyadh city residential outlookThe results of the Census carried out during 2010 have beenpublished in brief, and while we use the same for our base year dataand analysis, we await a detailed publication of the results. Especially,while we have the population estimate for each province and city, dataon households is not part of the information published so far. Wewould be able to provide a more detailed analysis and outlook oncethe remaining data is also published.

Census 2010 statistics provides three population estimates related to

Riyadh; 1) population at province level 2) population at the level ofRiyadh administrative region and 3) population in Riyadh city. For ouranalysis, we chose the relevant population estimate in Riyadh city toestimate the demand for residential real estate.

As per the statistics, Riyadh city had a population of 5.2 Mn as of2010, and we estimate the number of households in Riyadh city to bec.880,800 households. Our estimates are based on household size of5.89 in Riyadh city, which we expect to be similar to the household

size of Riyadh province (5.89 as per NHS). We derive our estimate byextending data from the 2004 census where household size in RiyadhCity was similar to that of Riyadh Province (5.46), and that populationin Riyadh city constitutes significant portion of the population inRiyadh province. The population in Riyadh city grew at 4.6% CAGRover 2004-10, with Saudi population growing at a CAGR of 1.8%,while expat population jumped by 10.2% (CAGR) over the period.Residential supply on the other hand was c.857,000 in 2010 as per JLLestimates, which leads to undersupply estimate of c.23,000 units. Thet t l d l i th ll Ri dh id ti l k t i

c.880,800 households inRiyadh city as on 2010

Residential supply inRiyadh city to grow by3.3% CAGR over 2010-14


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We forecast potential demand from incremental population growthalone in Riyadh city to grow by 4.4% over 2013 & 14. We assume the

average household size to remain at 5.89 - the provincial householdsize as of 2010, leading to an average of over 39,000 units ofincremental demand being added per annum. However, in the NHS,the government mentions that it aims to bring down the provincialhousehold size from 5.89 to 5.75. Nevertheless, we do not expect areduction in household size, due to the lack of focused supply, butinclude the effect of the reduction to understand desired futuretrends. Furthermore, our demand estimates for 2013 & 14 includes

replacement demand of an average of c.3,800 housing units perannum. As most of the supply is not expected in the Central &Southern parts of the city, where most of the middle and lower middleincome Saudi households reside and who constitute a substantial partof the overall population in the city, we expect the Riyadhs aggregateresidential market to remain undersupplied.

Rentals & Prices

Rents and price in Riyadhs residential market have continued to climb

higher, as a result of the undersupply of Saudi housing and crowdingof households (more than one household living in a housing unit,mostly seen in families with more than one generation occupying asingle housing unit). Published rental data for apartments and villas byJLL suggests that apartment rents have increased more in comparisonto villa rents since Q1-11 with average apartment rents havingincreases c.23% driven mainly by rental growth in Western Riyadhapartments (+65%), while villa rents increased at a lower 8.5%.Warooud, Malaz, Olaya and Sulaimania remain popular locations in

Ri dh it d t th i i it t h l d h it l hi h i

Over 39,000 units ofdemand to added peryear over 2010-14

Average apartment rentsin Riyadh increase byc.23% since Q1-11


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the period was driven by: 1) Higher investment activity from Saudisfor income generation as gross rental yields for apartments were 8%-

9%, while villa residences earned 4.5%-6%%, 2) Expats preferring tobuy rather renting residences.

Exhibit-11: Riyadh villa & apartment prices Q3-11 to Q2-12

Source: JLL, Markaz analysis

We forecast prices in Riyadhs residential market to continue toincrease in 2012 & 2013, as housing for Saudi middle incomehouseholds would continue to remain undersupplied as incrementaldemand continues to outstrip incremental supply and, rental yields stillwarrant investment activity from Saudis.

Villa prices in Riyadhincreases 23.9% sinceQ3-08

Gross rental yields forapartments in Riyadhc.8%-9%


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Jeddah city residential outlook

Similar to Riyadh city, we derive our residential demand side- the totalnumber of households in Jeddah city for 2010 using city populationestimates from the 2010 census data, as the households data is yet tobe officially published from the 2010 census.

Using the 2010 Census as our base year data, we estimate the totalnumber of households in 2010 to be c.735,000 based on a householdsize of 4.72 and Jeddah city population of c.3.45 Mn. The populationin Jeddah city grew at 3.9% CAGR over 2004-10, with Saudi

population growing at 3.1%, while expat population increased by4.7% over the period. The household size in Jeddah city was lowerthan the household size at Mekkah province in 2004 Census. Weextrapolated similar trends to 2010 and lowered the household sizeestimate in Jeddah city below the household size of 5.14 estimated byNHS for the Makkah Province. Residential supply as per JLL estimateswas c.702, 000 in 2010, which indicates that demand exceeds supplyby c.32,000 units. The higher demand can be ascribed to: 1) Theundersupply of Saudi housing similar to Riyadh city, mainly in thelower and middle income segments, due to lower affordability and 2)Lower income levels of expat households, leading to lower rentals andsubdued development activity 3) Replacement demand flows fromhouseholds who reside in the Central districts of Jeddah wherehousing infrastructure quality standards are lower and residences areolder, while most of the newer & higher quality residences are locatedin North Jeddah.

Exhibit-12: Jeddah residential market trends

Population in Jeddah citygrew by 3.9% CAGR over2004-10

Undersupply of c.32,000units in Jeddah as of 2010


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low income housing. Also, we expect land costs to continue to remainexpensive for developers, providing less incentive for development

activities, as rental yields continue to remain low, arising from expathousing affordability constraints. Moreover, established privatedevelopers also continue to focus on upper and upper middle classhouseholds due to higher rental realization rates. The mortgage lawand the NHS initiative should help alleviate these affordabilityconstraints in our view; however, we do not see any structuralimprovements altering existing demand-supply trends drastically over2013 &14.

Rentals & Prices

A similar rental trend to Riyadh was observed in Jeddah from 2011until Q2-12, with apartment rents witnessing higher rental increasesthan villas. Apartment rents in the Western Jeddah continue tocommand higher rentals and witness higher rental increases thanother parts of Jeddah (+24.7%), as per JLL estimates. Also, rents ofvillas in residential compounds continued to reportedly witness higherrental increases than the overall villa market (+1%) due to high

demand from expat households to live in gated villa residences. Thehigher increase of apartment rents in comparison with villa rents islikely attributed to the larger number of low income expats in Jeddah(as compared to Riyadh), who prefer to stay in apartments rather thanvilla residences. While residences in close proximity to the city like AlBalad, Malak are still preferred, new residential projects away from thecity like Al Fareeda & Mashraf are likely to see higher interest comingin, as these projects are targeted towards Jeddahs mid-incomehouseholds.

Jeddah to remainstructurally undersuppliedover 2012 & 13

Western Jeddahapartment rents increases24.7% since Q1-11


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Exhibit-15: Jeddah villa prices Q1-11 to Q2-12 Exhibit-16: Jeddah apartment prices Q1-11 to Q2-12


We expect prices in low & middle income housing in Jeddah tocontinue to move up, depending upon locations and type of residence,

as demand would continue to exceed supply. With land pricesconstituting over 60% of the total development costs, largerdevelopers more focused on catering to the mid and high incomehousing. As a result of the high land prices, we also expect emergingtrend of buyers opting for multi-family villa dwellings and duplexes tocontinue as against owning single family dwellings. As for rentals, weexpect villas in compounds to continue to increase higher than theoverall villa market due to the limited supply expected over 2012 & 13,and apartments with good amenities and infrastructure to witness

t l i f hi h t l i ti it

Land prices constituteover 60% of totaldevelopment costs inJeddah


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Dammam & Khobar residential outlook

Based on the 2010 census data, we estimate the number ofhouseholds in Dammam & Khobar as of 2010, representing residentialdemand, to be over 231,000 households, derived from populationestimates of over 962,100 in Dammam & 597,800 in Khobar. Weassumed a lower household size for Dammam (5.86) & Khobar (5.44)than the estimates of the Eastern Province as whole (6.38), providedby NHS. The population in Dammam & Khobar grew at 0.4% CAGRover 2004-10, with lower Saudi population in 2010 than 2004 (-3.1%),

caused likely by internal migrations, while expat population jumped by6.9% over the period. Based on residential supply estimates fromSaudi Rama, Dammam & Al Khobar were undersupplied by c.42,800units in 2010, as Saudi middle income households remainedundersupplied similar to Riyadh & Jeddah.

Exhibit-17: Dammam & Khobar undersupply build-up

Dammam & Khobarundersupplied by c.42,800residential units in 2010


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As per estimates from various brokers, rents in Dammam & Khobargrew by c.20% on an average from FY08 to Q2-12, with villa rents

(+24%) growing more than apartment rents (+16%). Prices of villaresidences (+13%) grew higher than apartments (+11%) from FY-08to Q2-12. We forecast the rental market in Dammam & Al Khobar toremain particularly strong until successful implementation of themortgage law, as home ownership still remains out of reach,particularly for the middle income households. Prices of high incomeresidences should continue to grow on higher demand, but the growthrates are likely to be lower than what was witnessed in the past, asincremental demand from migration is largely expected in the middleand lower income brackets. In spite of home ownership options, thelack of the availability of home financing would continue to hamperhigher realization of this latent demand potential until the mortgagelaw is successfully implemented and terms are conducive to homeownership for the middle income bracket.

Apartment and villa rentsgrew by c.20% avg. since2008 in Dammam &Khobar


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KSA office fundamentals

The office real estate market is primarily driven by 1) existing demandsupply trends 2) office based employment generation, reliant onoverall economic growth particularly in the private sector forincremental trends and 3) government initiatives towards encouragingoffice based business activity.

Labor growth in the services sector is the foremost driver for officespace demand. The non-oil private sector employment in KSA isexpected to grow by 2.5% over 2010-14 and account for 73.1% of the

total increase in jobs under the 9

th

DP. Labor growth in the servicessector is slated to grow by a higher 3.1% (CAGR) during 2010-14 andconstitute c.65.5%of the incremental employment, which should drivehigher demand for office space over 2013 & 14. Also licenses forcommercial establishments provided by the Ministry of Commerce andIndustry grew at a CAGR of 18.8% over 2009-11, after Y-o-Y growthslowed down to 2.3% in 2009, which should help absorb supply iftrends continue over 2012-14. Further, the ease of starting a businessin terms of number of days KSA is c.75% lower than the MENA

average, which could provide faster take-up of office supply.Exhibit-20: KSA commercial license issuance trends

Office space drivers togrow by 3.1% CAGR over2010-14


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Riyadh city office outlook

Our analysis suggests that the Riyadh office market is likely to remainoversupplied over 2013 & 14. The total city wide office stock as of2011 is c.3.2 Mn sq.m and they estimate city wide vacancy rates to be14% as of Q2-12, while CBD vacancies were estimated to be higher at16%, as per JLL estimates. However in spite of vacancies in theaforementioned areas, completed Grade A space reportedly remains inshort supply as the government, Saudi conglomerates & multinationalscontinue to seek high quality office spaces. Further office supply ofgrade A and B office spaces located in the CBD, North & East ring

Roads, Khurais, Mazer and Sitteen Streets, estimated at 1.8 Mn sq.min Q2-12 by JLL (c.56% of the total Riyadh office market), is expectedto grow by 21.3% over 2011-14, with c.1 Mn sq.m expected to beadded over 2013 & 14. The increase in supply is largely expected fromthe delivery of the first buildings of the new office stock from the King

Abdullah Financial District (KAFD) and Information TechnologyCommunications Complex (ITCC) projects with c.500,000 sq.m ofoffice space combined likely to be added over 2013. KAFD, developed

by the Public Pension Agency is located north of Riyadh, is mainlyGrade A quality office space along with a financial academy and otherrecreational facilities has a floor area of over 3 Mn sq.m. The ITCCcomplex is located next to the King Saud University & King AbdulazizScience & Technology City, with a floor area of 0.8 Mn sq.m mainlyconstituting office spaces, along with a research & developmentbuilding, and housing for IT & communications companies.Exhibit-22: Riyadh office rental trends Q3-08 to Q2-12

Riyadh city wide officestock of c.3.2 Mn sq.m asof 2011

KAFD & ITCC tocontribute to c.50% ofthe supply over 2013 &14


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structural positive trends emerging from the Riyadh office market.However, as new supply from KAFD and ITCC come in, and overall

office supply increases, we expect rents in current Grade-A (JLL Q2-12average: SAR 1,330/sq.m) & Grade B (JLL Q2-12 average: SAR900/sq.m) office market to decline and vacancy rates to increase, as aresult of the exodus to these new office spaces. These reduced rentalsshould translate into higher affordability for office space occupantswho could potentially deviate from existing Grade B & C office spacesand take up higher quality Grade A & B office spaces in Riyadh,thereby bringing down vacancy rates in such types of office spaces inthe longer term.


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Jeddah office outlook

The Jeddah office market, similar to Riyadh is likely to remainoversupplied over 2011-15. However as most of the new supply addedin 2012 is limited to one single project which is already 75%-80% pre-leased, we expect incremental office demand-supply trends to bemuch more balanced as compared to Riyadh, and higherachievements of the services sector labor growth to result in a quickertake up of the excess supply of office and unwinding of the supplyoverhang.

Exhibit-23: Jeddah office supply trends


Grade A & B office stock in Jeddahs CBD as of 2011 was 574,000sq.m and estimates of CBD vacancy rates stood at 27% as of Q2-12,

di JLL F h ffi l f d A d B ffi

Unwinding of office spaceoversupply in Jeddah tobe quicker than Riyadh


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Dammam & Khobar office outlook

Office space in the Dammam & Khobar market largely followed trendswitnessed in other office markets in KSA and remains oversupplied.Our estimates of vacancy rates stands at c.20% and our marketresearch suggests that supply is reportedly expect to increase at aCAGR of 7% over 2012-14 with almost half of the supply cateredtowards office spaces for organizations with 10-39 employees.

Exhibit-25: Dammam & Khobar office rents Q3-08 to Q2-12

Source: Markaz analysis

Demand-side fundamentals in the Dammam & Khobar are stillexpected to be driven by the government and oil sectors which are

lik l b CAGR f 4 5% d 2 4% i l 2012

Office rents in Dammam& Khobar declined by.15% avg. over 2008-15


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Real estate sector liquidity

Property and construction sector lending has been increasing steadilyfrom 2009 to 9M-2012 at a CAGR of c.17%, aiding property andconstruction GDP to grow at over 6% over the period. Further, lendingto the sector in 9M-12 has already surpassed the full year 2011 figureby c.4% pointing towards adequate liquidity available for the sector.Credit lending to real estate & construction sector as a percentage oftotal credit remained broadly stable from 7.2% in 2010 to 7.4% in 9M-12, after dipping in 2009 to 6.1%. Furthermore, real estate creditgrew marginally from c.7.5% of private credit in 2010 to c.7.8% in

9M-12, and increased from c.3.9% of total assets in 2010 to c.4.4% in9M-12. Mortgage financing trends have grown substantially from Q1-09 to Q2-12 growing over 200%, and witnessed a c.53% jump fromQ-o-Q from Q1-12 to Q2-12. The jump is mostly ascribed to increasedlending confidence on behalf of banks from the Real EstateDevelopment Fund (REDF) recapitalization and anticipation of themortgage law getting approved.

Exhibit-26: Building & Construction credit trends Exhibit-27: Mortgage financing trends

Construction and realestate lending remainedStable from 2010 to 9M-12


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Exhibit-28: KSA liquidity funding position

Source: SAMA, Markaz analysis

Transaction trends counterintuitive

Transaction trends, an indicator of the liquidity environment prevalentin the key real estate markets of Riyadh & Dammam declined fromQ1-11 to Q3-12 and are counterintuitive to the undersupply situationprevalent in KSAs residential market, even more so as lending to thereal estate sector has been stable. Earlier, the lower transactionactivity was ascribed by the market to diversion of capital towards theequity market looking at trends from Aug11 to Mar12. However,those observations have been rendered inaccurate as both real estate

d h d d l

Liquidity scenario strongas 94% of total banksfunding from internalsources

Intriguing transactiontrends witnessed sinceQ2-2011


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Exhibit-30: Transactions* on trailing six month summation basis

Riyadh transactions Dammam transactions

Source: MOJ, Markaz analysis

Exhibit-31: Yearly transactions trends

Riyadh transactions Dammam transactions


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Disclaimer

This report has been prepared and issued by Kuwait Financial Centre S.A.K (Markaz), which is

regulated by the Central Bank of Kuwait. The report is owned by Markaz and is privileged andproprietary and is subject to copyrights. Sale of any copies of this report is strictly prohibited. Thisreport cannot be quoted without the prior written consent of Markaz. Any user after obtaining Markazpermission to use this report must clearly mention the source as Markaz. The report is intended to becirculated for general information only and should not to be construed as an offer to buy or sell or asolicitation of an offer to buy or sell any financial instruments or to participate in any particular tradingstrategy in any jurisdiction.

The information and statistical data herein have been obtained from sources we believe to be reliable


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Kuwait Financial Centre MarkazMENA REAL ESTATE RESEARCH

markaz residential report 2013 - 2014

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