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, 2024 for your esteemed company. After three years of continuous decline, Kuwait's real estate market witnessed a remarkable recovery in total value in 2024, with the total value of transactions reaching KD 3.7 billion, an increase of 20% compared to 2023. Residential properties accounted for 41% of total transactions, which represents a slight decrease compared to 2023, however, residential real estate remains the leading sector in terms of transaction value, reaching KD 1.554 billion. Investment properties witnessed the largest growth in value, recording KD 1.224 billion, a 35% increase compared to 2023. The relative decline in real estate prices in certain areas such as Hawalli and Ahmadi contributed to boosting real estate activity in this sector. In the commercial real estate sector, the highest trading value was recorded in 2024, amounting to KD 745 million, an increase of 45% compared to the previous year. This sector benefited from several factors, most notably expectations of lower interest rates and increased credit facilities. Real Estate Recovery in 2024 Kuwait's population growth, along with the influx of expatriates, continues to boost demand for residential and rental properties. There is an ongoing need for affordable housing, as well as demand for luxury housing, especially in urban areas such as Kuwait City and Salmiya. The government plays an active role in providing affordable housing for Kuwaiti citizens through programs such as the Public Authority for Housing Welfare, which has contributed to the development of suburban areas and satellite cities, with a focus on meeting the needs of citizens through affordable housing options. Developers are focusing on creating more modern and integrated communities, incorporating various amenities such as parks, retail and office spaces. Kuwait's commercial real estate sector is witnessing a marked increase in demand for Grade A office space, especially in areas such as Kuwait City. This rise in demand is attributed to local and international companies seeking to establish offices in Kuwait, supported by government policies favorable to attracting foreign investment. In terms of co-working spaces, the growing trend towards co-working spaces, especially among startups and SMEs, reflects the significant changes in workplace dynamics and business models. These flexible spaces are gaining momentum in the market. Despite the growth in demand, the commercial real estate market is facing challenges associated with oversupply of office space in some areas, highlighting the need for strategic development and a greater focus on quality offerings. As for the financial and investment business results for the fiscal year 2024, the Group achieved a net profit of KD 1005 thousand {2023 - KD 829 thousand}. The net profit increased by 21% as total revenues amounted to KD 2,737 thousand (2023: KD 2,702 thousand) and net rental income amounted to KD 2,093 thousand (2023: KD 2,143 thousand). The Group's share in the results of an associate company amounted to KD 79,890 thousand (2023 - KD 146 thousand), while third-party property management fees amounted to KD 176,569 thousand (2023 - KD 110k) and other income amounted to KD 31k (2023 - KD 10k). Other expenses and charges amounted to KD 1,711 thousand {2023 - KD 1,857 thousand}, of which staff costs amounted to KD 812 thousand {2023 - KD 727 thousand} and general and administrative expenses amounted to KD 812 thousand {2023 - KD 727 thousand}. General and administrative expenses amounted to KD 277 thousand (2023 - KD 248 thousand), and depreciation amounted to KD 362 thousand {2023 - KD 342 thousand}.