In Kuwait while the total value of real estate transactions declined to 6.7 billion dollars in 2008, a fall of around 33% compared to 2007, it was still slightly higher than 2006.  Moving forward, the Kuwaiti market remains well placed for growth and recovery.  How would you describe the current climate in the Kuwaiti real estate market?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli : In the real estate market in Kuwait it is unclear right now.  However, the decline you mentioned is mainly due to a regulation issued by the government in 2008 that banned companies and institutions from developing private real estate areas for housing.  This segment then left the market and this explains the decline.  In Kuwait real estate has always been driven by a very strong supply and demand formula and right now the government package hasn’t taken effect yet for the demand to affect the supply.  As for our expectations we hope that it will be better and we will see less vacancies although they will still remain rather high.  In 2010 the outlook is positive but not as good as we would like it to be.  Compared to 2009 it will be better but compared to the neighboring economies it will be lower due to laws 8 and 9 from February 2008.

What is your opinion on laws 8 and 9?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: I believe that the laws are a mistake.  The goal of the regulation was to stop speculation on private real estate areas because they directly effect people and housing.  However, it did not succeed in this segment, it just took a large player out of the development scheme (companies and institutions) and this didn’t help.  This is a demand and supply issue and the laws did not help the benchmark. There is a limitation on land within Kuwait that causes problems.  

Do you think the law may change in the future?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  No I don’t think it will change.  The Islamic banks went to court against the objectives of the law and have won the case.  Right now I think the court will rule the law as null but this will take about a year.  After the final decree things should go back to normal.

How do you see the future development of property prices in the commercial and residential sectors?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  The development will be healthy and the investment in residential high rises due to the demand.  For retail real estate I don’t think there will be much demand so I don’t foresee any construction of that nature.

In February Kuwait’s parliament passed an economic development plan that authorizes the government to spend around 104 billion dollars on mega projects within the next four years.  What are your expectations for this place and are you going to participate?

 

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: Yes we are going to participate and are creating the infrastructure required for that plan currently.  I think it is a very ambitious plan for Kuwait but I think that all sectors needed this plan.

How would you assess the impact of the global economic meltdown on the real estate sector in Kuwait?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  The global meltdown affected the financing and this hurt the banks who are a major player in real estate development anywhere in the world.  Banks are hesitating as a result.  Eventually they will know who are the seasoned developers and who are not so they can avoid toxic assets but during the doom everybody developed real estate.  Once banks are back into the lending business then the development business can thrive again.  For Action Real Estate it is not a challenge to find financing because we maintained our mandate as a development and operation company so we are one of the few like that.  We have maintained this mandate from our inception and we are not worried about financing.  Our investment was in the mid-market segment which wasn't really effected so revenues are still there.  As for the construction for Kuwait Dynamics we have stayed very active and this economic package will help us and our expertise will be honed as we participate in the package.

What is the appeal of Kuwait Dynamic and Action Real Estate?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: We develop on time, on cost, and with great quality.  We are experienced and provide a full integrated solution where everything is under one umbrella for our clients needs.  It is like a one stop shop.  For Action Real Estate we are also timely, cost effective, and deliver great quality to our clients.

What are some of the projects coming up in the next five months?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  In concern to real estate we have a small mid-sized shopping center in Jahra (north of Kuwait).  As far as construction is concerned we are participating in bids with Kuwait Oil Company and Kuwait National Petroleum Company and I think we are going to be happy and landing a contract soon.  In the logistics sector we have a healthy relationship with LSI (a US defense contractor) and I think we will be looking for more opportunities related to that as well.

With the downturn, what can you say about the behavior of your clients?  How has the balance of power changed between the customers and the companies?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: The balance of power has not shifted a lot.  At the end of the day the end user is the one who runs the business and this is the most important segment of the equation.  For us, the power has always been with the end user so we haven't witnessed any shift in the balance of power.  We base our business off of the motto that the customer is always right.

Is your business Kuwaiti, GCC, European?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  It is international.  Our customers cover all spectrums of the world.

You are also part of the Action Group, a leading group in Kuwait that provides various services to different sectors, how does this reflect on your day to day operations?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:  It gives us more strength; we are fully integrated and perform a wide range of services.  Under Action Group Holding we also have other sectors that integrate with our services. For example, we have representation services for international contractors who are competing for jobs in Kuwait.  We also have a very healthy, strong consulting hub and we are joint-venture with two leading recruitment companies- MRI and Manpower.  It is all part of the package that we present to our customers.

How would you define your greatest challenge?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: The challenges are getting the job with the desired degree of quality we want on time.  Right now in this atmosphere competition is very high so you have to be very competitive to maintain quality.  On the strategic level we are looking towards becoming an international construction company and in 2010 we want to move more into the international arena.  We would like to expand within the GCC and further out into the Middle East and North Africa but we are still in the planning stages for our construction segment of the company.

What are the bullet points of your strategic goals for 2012?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli:   For 2012 from the real estate point of view we are looking to finish the development at hand in order to further develop a steady stream operational portfolio.  We plan to double our revenues by 2012 based on current and future projects.  As for construction/logistics we want to strengthen our operations in Kuwait and move out of Kuwait within the region.  

What would you like to say about Kuwait and what is your vision for the country?

Kuwait construction, Kuwait Real-Estate, Kuwait Logistics, Chairman and CEO of Kuwait Dynamics and General Manager of Action Real-Estate Company, Rawaf Bourisli: I think we should be perceived as an international professional market that welcomes international companies.  The growth will not be that great but it is steady and that is a great sign for any economy in the world.  Manpower and experience are very much available in Kuwait but we also need more.  From an HR point of view a new working law has been passed and will be effective in the next sixth months and taxation is very limited here so it is a very appealing market for international players.  The law will help sponsorship regulations of expats in Kuwait and make much more workable and practical conditions for them.  It will make businesses more easily able to employ expats all while protecting the worker’s rights and this will help Kuwait.