The UAE real estate market is expected to reach $710 billion by the end of 2024. To comply with the major objectives outlined in the UAE Net Zero 2050 and Dubai 2040 Urban Masterplan, the real estate industry in Dubai is gradually embracing sustainability.
Dubai, which is currently ranked third among cities worldwide with over 400 projects certified by LEED, is leading the way in the sustainability movement, which is seen as essential to future-proofing the nation’s real estate market.
Chief operating officer and founding member of ZāZEN Properties Madhav Dhar stated that upcoming developments will minimize negative environmental impacts by emphasizing energy-efficient buildings, efficient design, and sustainable construction methods.
Residential projects that maximize natural light, use thicker concrete slabs for better insulation, and incorporate smart technology, energy-efficient appliances, and even renewable energy sources like solar panels will help step up the drive and contribute to the nation’s green agenda, according to Dhar. The UAE’s leadership has extended the Year of Sustainability until 2024.
Higher levels of green certification enable buildings to compete with newly constructed stock that has been on the market for longer, according to a recent JLL study. These types of buildings fetch five to ten percent higher premiums in Dubai than in London (11.6 percent), nine major Asian markets (9.9 percent), and eight major US and Canadian markets (7.1 percent).
A further result of the departure from conventional ideas of sustainability is the growth in demand for certified “green” buildings that take social, economic, and health factors into account. While less sustainable or “brown” buildings face the risk of devaluation, this is essential for long-term value preservation and future-proofing real estate assets, according to JLL.
The UAE wants to target 40% energy efficiency in the construction sector and a 56% reduction in emissions from 2019 levels by 2030. According to Alida Saleh, head of Sustainability – MEA at JLL, the UAE is moving towards the “Climate Aware” phase, which holds great potential for growth as the country drives climate mitigation and adaptation strategies to achieve Net Zero by 2050. The UAE has been making steady progress toward decarbonization, frequently in partnership with the private sector.
A recent study found that over 80 percent 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.
According to a recent UBS Global Wealth Management survey, 75% of investors in the United Arab Emirates believe that sustainable development will become the norm by 2030. This belief is supported by the current surge in interest in environmentally conscious developments. Although return on investment (ROI) was traditionally considered the benchmark for success, 93% of investors now believe that choosing sustainable options will increase longevity rather than impact performance.
“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.