The situation in Kuwait has almost returned to normal, but the commercial complexes are unable to experience the benefit of returning patrons, in light of the remarkable vacations by tenants at several complexes, Al-Anba daily said.
The daily said, quoting an official at one of the complexes, that the rate of clearance in the commercial complexes and towers is around 10 percent, and will possibly increase further in the next few weeks. Negotiations are currently underway between some tenants and the owners of commercial complexes to reach a satisfactory settlement about rents they owe during the period of suspension of businesses as a precautionary measure against the coronavirus.
Based on the outcome of the negotiations and a good settlement, it will be made known if the complexes can retain their tenants.
Suffering
In this context, reliable real estate sources affirmed that the commercial sector will suffer greatly in the next stage, whether at the level of the administrative offices or commercial stores. The coronavirus crisis has seriously impacted the economic sectors in Kuwait, forcing many business owners to think about curtailing their workforce or cease renting their administrative and commercial office spaces, in a step aimed at reducing monthly costs towards savings to pay expenses.
It must be noted that the headquarters of many companies have shifted from luxury towers to smaller complexes and towers, as a consequence of the weak economic activity, high cost of living and the increase in inflation at all levels. The daily said, quoting sources, that many are of the opinion that the consequences of the new coronavirus pandemic on the Kuwaiti economy in general and the real estate sector in particular will not end soon, “and even if the pandemic ends and an effective vaccine is discovered during the year, the negative effects on various economic sectors will need years to be overcome”.
Loss of expats
The retail sector, small and medium companies, tourism and travel sector, and many other sectors have been hit hard, as some of them have gone bankrupt and others defaulted at a rate of up to 90 percent without there being a realistic government solutions to offer them a lifeline.
The Kuwaiti market will continue to suffer in the foreseeable future, even if life returns to normal, particularly due to the change in demographics, as expatriates were a significant part of the Kuwaiti market. Nowadays, Expats are threatened with mass layoffs or had a slash in their monthly income or visa restrictions that are forcing them to send off their families from the country. Therefore, the remarkable change in demographics has already begun to have an immediate impact leading to a stifling in the growth of economic activities in the retail markets, restaurants and other activities that were heavily dependent on them.
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