Kuwait, 6 September 2026: A new report by Kuwait International Bank (KIB) found that Kuwait’s investment property sector continued to lead real estate activity in the first half of 2026. The sector was supported by regulatory reforms introduced by the government, which helped redirect capital toward investment properties, regarded as the most stable segment and the best positioned to deliver sustainable operating returns.
The report highlighted that the real estate market has recently undergone significant changes following government measures aimed at regulating the residential and industrial sectors. These measures have prompted a broad segment of investors to focus on investment properties, amid rising demand for income-generating real estate assets and continued improvement in rental rates across several investment areas.
The report added that recent decisions by Kuwait Municipality have helped enhance the quality of the investment property sector through more effective regulatory requirements. These include the provision of parking spaces, improved services and compliance <a href="https://middleeastdaily.net/psx-786-investments-ltd-join-forces-with-ladiesfund-to-<a href="https://middleeastdaily.net/emirates-hosts-inaugural-travel-rehearsal-events-to-empower-neurodiverse-families-across-australia/”>empower-women-to-build-wealth/”>with modern planning standards, all of which strengthen the quality of real estate assets and increase their long-term value.
In this context, Fahad Al-Mansour, Senior Real Estate Analyst at KIB, said that transactions in the investment property sector amounted to approximately KD 574.2 million across 655 deals in the first half of 2026, compared with KD 828.1 million across 687 deals during the same period in 2025.
Al-Mansour noted that these figures should be viewed in the context of the conditions prevailing across the region during the first half of the year. Markets were affected by heightened uncertainty stemming from geopolitical developments, prompting some investors to postpone major transactions and weighing on the overall value of real estate trading.
He also stressed that the decline does not reflect a weakening of the investment property sector, but was primarily driven by the lower value of completed transactions. Overall real estate activity remained at healthy levels, as reflected in the figures, with the number of deals declining by only 4.7% compared with the same period last year, while the decline was concentrated in higher-value transactions.
He added that the completion of 655 transactions within six months, despite regional challenges, reflects the sector’s resilience and continued investor confidence. It also underscores sustained underlying demand for investment properties, which remain among the most stable segments of the real estate market.
Shift in investor preferences
Al-Mansour noted that the market is witnessing a noticeable shift in investor behavior, with a growing preference for acquiring mid-age investment properties and redeveloping and upgrading them, rather than purchasing newly built assets. This model offers greater potential for value creation and higher returns.
He explained that redeveloping real estate assets helps improve building quality, enhance operational efficiency and increase rental income. These improvements, in turn, can raise the property’s market value upon resale, making this strategy increasingly attractive to investors.
Positive outlook for H2
Al-Mansour concluded by reaffirming that the investment property sector is well positioned to continue leading the market in the coming period, supported by sustained demand for investment housing units, rising rental values, ongoing regulatory reforms and continued improvements in the quality of new developments.
He added that greater geopolitical stability is expected to gradually bring major transactions back to the market, positively affecting the total value of real estate trading. He expects activity to strengthen in the second half of the year, further reinforcing the investment property sector’s position as a key contributor to the national economy.