Chairman’s Message

Gentlemen shareholders

The Board of Directors of the Kuwaiti Real Estate Investment Group has the honor to present to you the forty-six annual report, including the most important economic developments at the global and local levels, in addition to the results of the annual performance, the consolidated financial statements, and the report of the independent auditor for the fiscal year ending on December 31, 2025 for your esteemed company. The property sector is one of the cornerstones of the Kuwaiti economy, given its direct link to economic activity, income levels, consumer and investment spending, and the flow of finance, as well as its clear impact on social stability and housing affordability. Although property has long been viewed as a safe haven, recent years have shown that this sector is inseparable from local and global economic changes; indeed, it is directly and cumulatively affected by them. In 2025, the Kuwaiti property market entered a phase that was relatively different from what had preceded it, as price movements were no longer as they had been in the past, but rather became the result of the interaction of a range of economic, regulatory and behavioural factors, The decline in the private housing sector, which began at the end of 2022, became evident during 2024 and accelerated in 2025. On the economic front, interest rates continue to be a key factor influencing purchasing and investment decisions, whether for individuals, developers or companies, given the higher cost of financing compared to previous periods. Although a relative decline in interest rates was recorded during 2025, the impact of this decline was not immediately or fully reflected in real estate activity in general, given the continued caution among some market participants. Conversely, the investment housing sector witnessed a notable recovery and a rise in price levels during 2024 and 2025. The clarity and accuracy of property data have become more important than ever, given the growing need for reliable information that helps to understand the reality of prices, yields, and trends in supply and demand. In the absence of a comprehensive, regularly updated official database, reliance on professional analysis and careful interpretation of market movements remains essential to avoid decisions based on impressions or ill-considered expectations. As regards the financial and investment results for the 2025 financial year, the Group achieved a net profit of KD 1,181,000 {2024 – KD 1,005,000}, representing a 17.5% increase in net profit, with total revenue amounting to KD 2,957,000 (2024 – KD 2,744,000), whilst net rental income amounted to KD 2,233,000 (2024 – KD 2,094,000). Furthermore, the Group’s share in the results of an associate company amounted to KD 42,000 (2024 – KD 80,000), whilst fees for the management of third-party properties amounted to KD 278,000 (2024 – KD 177,000). Other income amounted to KD 44,000 (2024 – KD 31,000). As for other expenses and charges, these amounted to 1,750,000 Kuwaiti dinars {2024 – 1,717,000 KD}, of which staff costs were 855,000 Kuwaiti dinars } 2024 – 813,000 KD), whilst general and administrative expenses amounted to 288,000 Kuwaiti dinars (2024 – 277,000 KD) and depreciation to 371,000 Kuwaiti dinars {2024 – 363,000 KD}.