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COMMENT
Industry insight
RAJA ALAMEDDINE LOOTAH REAL ESTATE DEVELOPMENT
Sustainable developments in the region have become mainstream
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rbanisation and economic growth go hand in hand, especially in the UAE where real estate plays a key role in the local economy. The Middle East’s real estate industry is continuously developing and evolving and there is an increasing concern for sustainability within the region as well as worldwide. According to a recent report, buildings account for around 40% of energy use, 25% of water consumption and one-third of global greenhouse gas emissions. With such a staggering footprint, real estate holds immense economic, social and environmental impact. Sustainable real estate development is not a novel idea, rather it is currently gaining prominence in the country and region. Combining eco-conscious design, materials, construction practices, and technologies in buildings is rapidly becoming commonplace and the new generation of property owners and renters expect it. With the growing energy needs of the MENA region, concepts such as green buildings present the opportunity to rethink how homes are built. The UAE has emerged as a leader to bring about the energy transition within MENA. It has shown promise in delivering stateof-the-art green buildings, while the UAE Energy Strategy 2050 aims to increase energy efficiency across the country by 40%. The country has also made a commitment to achieve
April 2022 | MEConstructionNews.com
net-zero emissions by 2050. The UAE ranked 14th globally for the number of sustainable buildings in a survey of 373 corporate real estate professionals undertaken by Knight Frank. It was also the only country from the GCC to feature in the top 30, with 869 green-rated buildings. Saudi Arabia too has ushered in a new era with its Sustainable Vision 2030 and aims to reach net-zero emissions by 2060. From policy development and investment to planning and infrastructure, sustainability is at the heart of the region. Experts observe that the spotlight will shine on community-based sustainable developments over the next few years in line with global sustainability goals and those companies that are quick on the uptake will reap the rewards Along with the drive for sustainability comes the need for technologies to support it thereby creating a burgeoning segment in the real estate sector — smart buildings. A report by Technavio predicts that the global smart buildings market will increase 13% in annual value, reaching $19.17 billion by 2024. Dubai and Abu Dhabi are two of the top-ranking smart cities for technology in the IESE Cities in Motion Index 2020. Amid the Covid-19 pandemic, interest in smart buildings has surged. Consumers are keen on technologies that make their life smoother such as smart cooling and lighting systems, smart elevators, app-driven maintenance and more. Millennial spending is the key driver for many sectors’ future growth and for this demographic, lifestyle and technology are intertwined. FinanceOnline found that millennials will remain the biggest real estate buyers worldwide with a forecasted rise in 2022 comprising around 55% of global real estate market sales. As the new generation of homeowners and renters become key players within the market, developers are evolving to fulfil their preferences. Especially when it comes to sustainability and environmentally friendly practices, millennial loyalty and spending habits tend to veer towards companies that are eco-conscious. As with any shift, companies have had to reevaluate their strategies and adapt to millennials as the majority customer dictates the market. There is a clear pathway for real estate development, and it is sustainable design. Raja Alameddine is CEO, Lootah Real Estate Development.
ANKITA RAO
FREELINE ENGINEERING CONSULTANTS
The key challenges facing the completion of projects
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onstruction, as an industry, has always been fascinating and volatile in equal proportions. It is very exciting to witness the metamorphosis from scribbles on a drawing board to a full-fledged constructed project. The current turbulent times have magnified the volatility across all industries and brought it to the fore, but specific to our industry, we are no strangers to the ebbs and tides. Specific to these current times, we have noticed the following challenges leading up to the completion of projects: 1. METEORIC RISE IN THE DEMAND FOR RESIDENTIAL DEVELOPMENTS SPECIALLY VILLAS: This market curve is both a boon and a bane for us. Boon because we now have a higher influx of Villa projects and bane because this seems to be the only sector where investors seem to have confidence in. In some cases, this has resulted in redirection of commercial project capital towards private residential investments thus resulting in delay until a new influx of capital comes in. If there was ever a time when homes were perceived as the safest haven in true sense of the word, it is probably now. With many businesses moving off-site towards home offices, there
