Investments are taking myriad forms ranging from retrofitting existing buildings to designing and developing certified assets from the grassroots.
In the Gulf and the wider Middle East, the conversation around future cities that offer fully integrated, net-zero energy and vibrant communities with an eco-friendly lifestyle, has increasingly become more robust as the region prepares to host two watershed climate conferences over the next 18 months – COP27 at Sharm El Sheikh in Egypt this November, and COP28 in the UAE next year.
As reflected in the UAE’s national agenda, this is a brilliant opportunity not only to integrate a culture of sustainable thinking around the major pillars of the economy, but also to achieve a perfect balance between economic and social development while preserving precious natural resources for future generations, through collaborative work between the private and public sectors.
The rising significance of sustainable communities in the mix of real estate inventories can also be gauged from their contributions to the sector in spurring economic growth, amid a legislative environment that increasingly favours sustainable assets.
In Sharjah, a remarkable growth in the performance of the real estate sector in the first quarter of 2022 saw more than 21,615 transactions worth approximately AED 6.3 billion take place. According to data provided by the Sharjah Real Estate Registration Department, the highest value of trades was recorded in March, with total transactions worth AED 2.7 billion marking a 32.3% increase compared to February 2022.
Along with the department’s several sustainable and smart digital services to serve real estate investors and developers in Sharjah – like the E-Developer platform – pioneering projects such as Sharjah Sustainable City (SSC) have been at the forefront of driving sustainable capacity growth for the emirate’s real estate industry.
Indeed, the Sharjah government’s efforts to spearhead reforms and market-leading initiatives have been a significant factor in encouraging and attracting foreign investment. As highlighted at the inaugural Investopia global summit at the World Government Forum earlier this year, Sharjah has always played a leading role in amplifying the UAE’s global competitiveness as a preferred investment destination.
One of the UAE’s most diversified emirates, nearly 96% of economic activity in Sharjah now comes from non-oil sectors, with sustainable developments playing a key role in creating world-class infrastructure and propelling the emirate’s readiness for future growth.
According to research conducted by Knight Frank, global investors already manage more than $120 trillion of financial assets (including real estate) under voluntary climate change disclosures, while there are at least 120,000 green-rated real estate assets in clusters spread across the world.
The growing momentum for sustainable real estate is not surprising from an investor’s perspective, with a World Economic Forum (WEF) report earlier this year estimating that green certifications yield a rent premium of 6% and a sales premium of 7.6% on average globally. Conversations about real estate today are increasingly peppered with ‘green premiums’ and ‘brown discounts’, i.e. buildings that fail to live up to higher environmental standards and are seen as less valuable for the future.
The world’s built environment contributes an estimated 40% of global carbon emissions, and it will take an astounding $5.2 trillion over the next decade alone to decarbonize it as per WEF estimates. The global focus has therefore rightly moved to create genuinely sustainable net-zero communities, providing real-life solutions related to food security, water, and energy management, as well as natural resource conservation.
The idea and perception of a “best-in-class” real estate project has therefore matured from simply being about stunning views and soaring skyscrapers to championing net-zero energy, creating sustainable mobility and food ecosystems, promoting health and wellbeing, and being resilient to climate change.
That’s exactly the concept that Sharjah Sustainable City has pioneered in the emirate – a concept that has found growing adoption among other real estate developments since its inception.
With sustainable real estate developments still remaining a niche concept in the UAE, Sharjah Sustainable City is only the third such project announced in the country – after Masdar City in Abu Dhabi, and The Sustainable City – Dubai, and the first project of its kind to be launched within the emirate of Sharjah.
Modern and smart villas powered by solar energy, built with sustainable materials, passive designs and renewable energy production that reduce utility bills and operational costs, and boasting 100% recycling of water and waste as well as the opportunity to cultivate your own green produce within the community – these were novel features for real estate investors and homeowners in the region a few years ago.
As the strong interest in Sharjah Sustainable City has demonstrated, stakeholders have been quick to grasp the immediate economic advantages that sustainable communities can provide, even sparking proposals to establish similar projects in Australia and the US.
It is heartening to see the growing realization by investors, homebuyers, and the general public, that the positive social and environmental impacts of projects like these are essential to the well-being of our future generations.
Working in tandem with the Sharjah Government’s initiatives to develop social infrastructure, Sharjah Sustainable City has thus emerged as a key pillar of fulfilling the emirate’s vision of a sustainable and prosperous future, as the dialogue around net-zero communities gathers global urgency.