Gentlemen shareholders

The Board of Directors of the Kuwaiti Real Estate Investment Group has the honor to present to you the forty-third 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, 2023 for your esteemed company. This has been Many politically, economically, healthily and socially affecting events occurred at the international and local levels, the most important of which is the series of successive hikes in interest rates globally and locally, with a rate of 4.25 registered by the Central Bank by the end of 2023. In addition to the Russian-Ukrainian war, which are considered the main nerve center for many of the world's food commodities and raw materials, which affected global and local inflation rates. Oil markets, Kuwait's strategic commodity, also witnessed fluctuations during 2023 However, in general, the positive indicators remain positive locally by achieving a budget surplus that enhances economic activity and contributes to stimulating spending on development projects. As for the activity of the real estate sector, it is subject to change from one period to another based on the trends of investors and based on state policies, indicators and decisions related to the political and economic situation and the rise in interest rates. Inflation in Kuwait stabilized in the second half of 2023 as monetary policy tightened. Prices in the housing services component rose from 1.44% y-o-y at the end of 2022 to 3.13% y-o-y in October 2023 mainly driven by residential rents which rose by 3.4% y-o-y in October 2023 from 1.51% y-o-y at the end of 2022 Credit growth to the private sector slowed significantly in 2023 to 2.5% y-o-y in October 2023 compared to 9.1% y-o-y growth in October 2022 amid a rising interest rate environment. Real estate prices stabilized and rents maintained relatively stable levels overall in 2023. While the value of real estate transactions decreased by 26% in the first nine months of 2023 compared to the same period last year, based on an assessment of various macroeconomic indicators, we believe that the real estate market in Kuwait will remain stable in 2024 with the value of transactions expected to increase due to the expected decrease in interest rates. As for the financial and investment business results for the fiscal year 2023, the Group achieved a net profit of KD 829 thousand {2022 - KD 699 thousand}. The net profit increased by 19% as total revenues amounted to KD 2,702 thousand (2022 - KD 2,453 thousand), an increase of KD 249 thousand, and net rental income amounted to KD 2,143 thousand (2022 - KD 2,017 thousand), of which net rental income amounted to KD 2,143 thousand (KD 2,017 thousand). The Group's share in the results of an associate company amounted to KD 146 thousand (2022 - KD 86 thousand), while third-party property management fees amounted to KD 110 thousand (2022 - KD 104 thousand) and other income amounted to KD 10 thousand (2022 - KD 38 thousand). Other expenses and charges amounted to KD 1,857 thousand {2022 - KD 1,747thousand}, of which staff costs amounted to KD 727 thousand {2022 - KD 971thousand} and general and administrative expenses amounted to KD 727 thousand {2022 - KD 971 thousand}. General and administrative expenses amounted to KD 248 thousand (2022 - KD 225 thousand), and depreciation amounted to KD 342 thousand {2022 - KD 331 thousand}.