Kuwait Investment Authority, the country's sovereign wealth fund, will establish a 1 billion dinar ($3.6 billion) portfolio to invest in Kuwait's real estate market to take advantage of lower property prices.
The portfolio, which won't invest in private housing, will be managed initially by Kuwait Finance House, with the possibility of assigning two other managers, state news agency KUNA reported Wednesday, citing a statement from the KIA.
Kuwait Finance House, the country's largest Islamic bank, is initially assigned to manage 250 million dinars of the portfolio's total capital, Emad al-Thaqeb, the bank's assistant general manager for financing, said in an e-mailed statement. “The portfolio will focus on commercial real estate, which is the most impacted by current economic conditions,” he said in the statement.
Kuwait, which restricts foreign ownership of property, has seen property prices slump about 30% after the government banned companies from investing in real estate to stem inflation, Majed Azzam, analysts at stock research firm Alembic HC Securities, said Wednesday.
Kuwait has been suffering from a shortage in both residential and commercial properties as delays in public investments aggravated the imbalance, Mr. Azzam said.
The KIA oversees $202 billion, according to data from the Sovereign Wealth Fund Institute.
