With the UAE’s real estate market on track to reach $710 billion by the end of 2024, Dubai’s real estate sector is progressively embracing sustainability to align with key mandates envisioned in the Dubai 2040 Urban Masterplan and UAE Net Zero 2050.
Currently ranked third in global cities with more than 400 projects with LEED certification, Dubai is spearheading the sustainability drive that is considered an integral part of future-proofing the country’s real estate landscape.
Madhav Dhar, chief operating officer and founding member of ZāZEN Properties, said prioritising energy-efficient buildings, efficient design and sustainable construction methods will ensure that upcoming developments mitigate negative environmental impacts.
With the UAE’s leadership extending the Year of Sustainability to 2024, residential projects that make the most of natural light, utilize thicker concrete slabs for improved insulation, and incorporate smart technology, energy-efficient appliances and even renewable energy sources like solar panels, will help step up the drive while contributing to the country’s green agenda, Dhar said.
A recent JLL research revealed that buildings with higher levels of green certification can compete with new stock entering the market for longer periods of time. In Dubai, such buildings command 5 per cent to10 per cent higher premiums as compared to green premiums of 11.6 per cent in London, 9.9 per cent across nine major markets in Asia, and 7.1 per cent across eight major markets in the US and Canada.
The shift from traditional notions of sustainability has further seen a rising demand for certified ‘green’ buildings aligned with environmental, social, and health considerations. This is crucial for long-term value preservation and future-proofing real estate assets while less sustainable or ‘brown’ buildings face the risk of devaluation, according to JLL.
The UAE aims to reduce emissions by 56 per cent in 2030 compared to 2019 levels while also targeting 40 per cent energy efficiency in the construction sector. The UAE’s continuous strides in its decarbonisation journey, often in collaboration with the private sector, is driving it towards the ‘Climate Aware’ phase, which holds great potential for growth as the nation drives climate mitigation and adaptation strategies to achieve Net Zero by 2050, according to Alida Saleh, head of Sustainability – MEA at JLL.
A recent study found that over 80 per cent of UAE residents believe it is time to focus on “preventing further damage” rather than “reversing damage already done.”
“With the UAE’s real estate sector anticipated to reach a staggering value of $710 billion by the end of 2024, this reinforces the importance of developers prioritizing sustainability in upcoming projects. By emphasizing green practices, the sector can play a pivotal role in achieving the country’s carbon emission reduction targets by the half-century mark; yielding the potential to increase the nation’s GDP by approximately $1 trillion before 2050 and to simultaneously transform the real estate landscape so that future generations can inherit a more sustainable world,” ZāZEN Properties said in a statement.
With a recent survey conducted by UBS Global Wealth Management showing that 75 per cent of UAE investors think that sustainable developments will become the norm in 2030, this notion is backed by the surge in interest in environmentally conscious developments today. While ROI was once thought to be the measure of success, 93 per cent of investors now think that selecting sustainable options won’t affect performance but rather enhance longevity.
“With an increased preference for sustainable real estate, a shift in investment trends is poised to kick off in the UAE and have a positive impact that extends into the coming years. Developers who launch sustainable community-centric developments with world-class amenities can accordingly cater to a variety of consumer preferences and lifestyles, reshape the UAE’s real estate landscape, adhere to both regional and global green objectives, and inject added value to the country’s economy as a whole,” said Dhar.