KIPCO plans $5bn real estate project

Updated 13 September 2015
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KIPCO plans $5bn real estate project

DUBAI: Kuwait Projects Co. (KIPCO), the country's largest private sector investment firm, is planning a $5 billion real estate scheme on the outskirts of Kuwait City, the company's vice chairman told a local newspaper on Sunday.
The 380,000-square-metre project is planned for the Al-Daiya area where several foreign embassies are located, Faisal Al-Ayyar said in an interview with Al-Qabas newspaper.
It is set to include both residential and commercial spaces, as well as infrastructure such as roads, parks, walkways and electricity.
United Real Estate, a unit of KIPCO, will be responsible for implementation, along with other unnamed entities, he said.
KIPCO aims to present its plans to regulators in the coming days and to begin implementation this year.
"The project is considered the largest and most important in Kuwait, especially in the real estate sector," he told Al-Qabas.
Al-Ayyar acknowledged concerns about bureaucracy, noting that KIPCO's successful bid to develop Abdullah Al-Ahmed Street a decade ago was later canceled by parliament.


World’s biggest sovereign fund worried about trade wars

Updated 58 min 7 sec ago
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World’s biggest sovereign fund worried about trade wars

  • The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter
  • Markets are worried about a trade dispute between the United States and China

OSLO: The managers of Norway’s sovereign wealth fund, the world’s biggest, expressed concern Tuesday about global trade tensions, which could heavily impact its value.
The fund posted a positive return of 1.8 percent, or 167 billion kroner ($19.8 billion), in the second quarter, helping erase a loss of 171 billion kroner in January-March that was attributed to a volatile stock market.
The Government Pension Fund Global, which saw its total value swell to 8.33 trillion kroner by the end of June, manages the country’s oil revenues in order to finance Norway’s generous welfare state when its oil and gas wells run dry.
But Norway’s central bank, which runs the fund, said geopolitical and trade tensions presented a risk.
“It’s fair to say that increased trade barriers or even trade wars will not be beneficial for the fund as a long-term global investor,” Trond Grande, the deputy chief of Norges Bank Investment Management, told reporters.
Markets are worried about a trade dispute between the United States and China. Accusing Beijing of unfair competition, the US administration is considering slapping a new round of levies worth $200 billion on Chinese goods.
Talks between the two slated for Wednesday and Thursday aimed at resolving the dispute have however eased concerns somewhat.
Following US-Turkey tensions that sent the Turkish lira and the Istanbul stock market tumbling, the Norwegian fund said its assets there were worth less than the 23 billion kroner they were at the beginning of the year.
“We’ve seen the market rise for a long time, that there are different political and geopolitical events in the world that can affect the market, and we have to be prepared for the fact that (the value of) the fund can go down a lot,” Grande concluded.
The fund’s strong second quarter was attributed primarily to its share portfolio, which accounts for 66.8 percent of its investments and which rose by 2.7 percent.
Real estate holdings, which account for 2.6 percent of its holdings, rose by 1.9 percent, while bond investments, which represent 30.6 percent, remained flat.
Faced with falling oil revenues in recent years, the Norwegian government has been tapping the fund to finance public spending since 2015. But with oil prices recovering, the fund registered its first inflow in three years in June.