Recent extreme weather events around the world have acted as a timely reminder of the importance of sustainability in the real estate sector. Investment in ‘bricks-and-mortar’ is not only about providing financial stability. It is also about ensuring people and assets are protected from an increasingly hostile climate.
That is why sustainability remains one of the key priorities both for companies looking to rent commercial property, and for investors looking for solid returns in real estate. Even in the Dubai commercial property market, where vacancy rates in the single digits are causing fierce competition for space, companies are unwilling to compromise on core sustainability principles.
From LEED-certified office buildings to energy-efficient commercial spaces, developers in the UAE are increasingly focusing on green building practices and sustainable design. This not only aligns with global sustainability goals but also reflects the wider commitment to responsible urban development.
Raising the bar
The UAE set new standards for international cooperation by hosting COP28 in 2023, which resulted in the historic ‘UAE Consensus’ on climate neutrality. The Dubai Clean Energy Strategy aims to produce 75 per cent of its energy requirements from clean sources by 2050, which is spurring the implementation of green construction standards designed to minimize environmental impact and maximize efficiency.
Of course, there are long-term financial benefits from investment in green building technology. According to data from the Dubai Electricity and Water Authority (DEWA), green buildings in Dubai can achieve up to 20 percent savings in electricity and water consumption compared to conventional buildings, translating into significantly lower operating costs.
The green premium
The push for higher sustainability standards has been led by the properties in the premium sector. Index Tower, which is mostly owned by Emirates REIT, was one of the first towers in the region to incorporate its surrounding environment into its fundamental design principles. As one example, the architect reduced the amount of glass in the façade to a minimum without compromising the amount of light inside. As a result, the tower’s environmental strategy significantly lowers the requirement for air conditioning within the building and substantially reduces energy costs.
The rise in demand for mixed-use developments is also driving awareness of the need to integrate sustainability into design. As urbanization continues, there will be growing demand for spaces that offer a combination of residential, commercial and recreational amenities in vibrant mixed-use communities. Access to green spaces and cooled areas will become ever more important in these developments, along with a focus on environmentally friendly energy use.
As Dubai continues to evolve and adapt to changing global trends, it will remain at the forefront of innovation and development in the commercial real estate sector. Sustainability, mixed-use developments, technology and strategic positioning will all help steer the direction of the sector in support of climate-neutral goals. By embracing these trends and leveraging its unique strengths, the city is poised to maintain its status as a premier destination for commercial investment and growth in the years to come.
Thierry Delvaux is CEO of Equitativa Dubai Ltd.
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