This is the second time Britain has issued sukuk—it made history in 2014 by becoming the first country from outside the Islamic world to do so.

That first sukuk saw investors place over £2.3 billion of orders—a significant oversubscription that demonstrated the enormous demand for a Western-issued sukuk.

A STATEMENT OF INTENT

The UK government hopes the sukuk will attract significant investment from the Gulf States. The Treasury has already announced that the issuance has “attracted high-quality global demand,” with orders in excess of £625 million.

It was sold to a broad range of investors around the world.

Chancellor of the Exchequer Rishi Sunak said: “We’ve set out ambitious plans to make the UK the most open and dynamic financial centre in the world. By launching our second sovereign sukuk, we’re cementing the UK’s position as the leading global hub for Islamic finance outside of the Islamic world.”

This is a strong statement of intent as Britain seeks to build more post-Brexit economic relationships. It is also seen as a particularly strong message given the overall economic uncertainty around the world.

HUB FOR ISLAMIC FINANCE

The issuance is aimed at maintaining London’s position as the most important Western hub for Islamic finance and winning over investors from the Middle East and Asia.

The capital already hosts more than twenty international banks operating in Islamic finance—five of which are fully Sharia-compliant—as well as a number of law firms geared towards supplying legal services to Islamic finance clients.

But London has competition: Ireland and Luxembourg are building advanced infrastructure aimed at Islamic investors and fund managers, and may seek to attract business with the promise of easy access to European Union markets.

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With human health, happiness and wellbeing coming to the fore over the course of the COVID-19 pandemic, authorities are increasingly looking to smart technology to improve quality-of-life. MarketsandMarkets predicts the smart cities market will grow from $410.8 billion in 2020 to $820.7 billion by 2025.

WHAT IS A DIGITAL TWIN?

At the heart of this growth is the digital twin.

A digital twin is a digital copy of a physical asset. It is used to run simulations of real-world situations in order to optimise systems, responses and practices, and monitory real-time performance.

These digital copies can simulate an entire city, in order to, for instance, calculate the impact of increased traffic. It can also simulate a single asset, such as a subway line.

They are particularly useful for simulating disasters, break-downs, and system failures in order to discover the fastest and most efficient way of repairing a broken asset or avoiding an incident.

For example, at last year’s Year in Infrastructure Awards, Águas do Porto used digital twins to improve the management of the urban water cycle. This resulted in operating gains of 25% and reduced water supply failures by around 30%.

MIDDLE EAST AT THE FOREFRONT

Digital twins are finding use in the MENA region, including at Dubai’s delayed Expo 2020, now set to take place in 2021.

The platform, which utilises Siemens’ MindSphere Internet of Things-enabled technology, will use data gathered before and during the Expo to optimise the event, implementing energy, building and security management. Using simulations, it has also supported the design, planning and construction of the venue itself.

The Middle East is investing heavily in smart cities. Saudi Arabia, Dubai and Abu Dhabi are in particular embracing the Internet of Things to plan new sustainable infrastructure powered by renewable energy.

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In particular, the question has arisen of what to do with empty office space, and how to make the most of a predicted future demand for co-working spaces.

EMBRACING THE "NEW NORMAL"

In many countries affected heavily by the Covid-19 pandemic, working from home has become the “new normal”. It is unlikely that employees in these nations will return to their offices full-time, making co-working and blended working spaces extremely valuable, both for companies looking to reduce their office space, and home workers looking for an alternative workspace.

One of the solutions may be hybrid hospitality, where hotels provide space for co-working spaces on their property. Global real estate advisor Colliers International predicts that hybrid hospitality could increase turnover for hoteliers by up to twenty per cent.

It’s a useful way for hoteliers to take advantage of the new economy to earn some additional income.

A FLEXIBLE APPROACH

Many hotels across the MENA region are likely to invest in better conference facilities, meeting rooms and even hotel rooms better suited for working and meeting, with, for instance, concealed beds and meeting-appropriate furniture.

Unlike offices, hybrid hospitality can be more flexible and responsive, providing a 24-hour, 7-day workspace serving businesspeople, tourists and the local community alike. This flexibility means workers can choose whether to establish a base at a co-working space or simply drop in and out for ad hoc meetings.

After a year of uncertainty for the hospitality sector, taking a hybrid approach as global travel recovers and in-person business meetings pick up could provide a guaranteed income stream and aid the industry’s economic recovery.

Hyatt Hotels is just one brand embracing hybrid hospitality, offering meeting and conference services that cater for online and offline customers. It is set to establish its new offering in all its Middle East and Asia Pacific sites.

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LEED certification—an internationally recognised standard for sustainable design, construction and operation of commercial buildings—can help by ensuring your real estate meets a minimum level of environmental performance.

Most modern buildings are required by national law to meet a certain standard of sustainability. They are designed to reduce their impact on the environment by integrating new building practices and smart technology.

Although many firms will be attracted by the efficiency savings a sustainable building offers, the benefits to its occupants—both in terms of health and productivity—are also significant.

IMPROVING AIR QUALITY

LEED certification covers a number of different environmental factors, many of which are specifically designed to improve quality-of-life for building occupants.

For instance, the Safety First: Managing Indoor Air Quality During COVID-19 credit was developed recently to improve existing air quality standards and improve ventilation. Clean, fresh airflow not only limits the spread of COVID-19 but has health and productivity benefits.

BETTER PRODUCTIVITY, HEALTHIER EMPLOYEES

Research by Harvard and Syracuse Universities found that workers operating in “green condition”—i.e. where ventilation is improved and carbon dioxide levels reduced— performed 61% better on cognitive tasks.

Meanwhile, a study published in the journal Building and Environment conducted on 10 different green-certified buildings found employees had 30% fewer headaches and respiratory complaints in a green office environment.

Meeting these LEED credits can not only pay dividends in terms of your reputation, social responsibility and efficiency savings, but it can also improve the health and wellbeing of employees in a way that seriously improves productivity and loyalty.

To know more about LEED Certification, click here

Earlier this year Dubai announced that the emirate was opening up its long-term visa options to a greater number of non-Emirati residents. Now, the UAE government has gone one step further, announcing new rules which will allow a more flexible approach to work visas in the country.

On March 21, HH Sheikh Mohammed, vice president and prime minister of the UAE, and the ruler of Dubai said in a tweet: “During a cabinet meeting I chaired, we approved a new Remote Work Visa that enables employees from all over the world to live and work remotely from the UAE even if their companies are based in another country.”

The one-year visa is likely to significantly impact the rental market in the country if the country sees uptake from the new legislation. While it is unlikely that those currently working from home due to the COVID-19 pandemic will buy-in to the new scheme, it is expected that the global uptick in the emerging gig economy could create demand for the new scheme.

Meanwhile, the second piece of legislation announced – which will allow tourists to enter the country multiple times for 90-day visits over a five-year period – is expected to also create an increase in demand for short-term let contracts in the country’s real estate market.

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In March 2020 the world underwent a seismic shift, which saw the majority of global offices move their employee workforce to remote home-based work, in response to the Covid-19 pandemic.  While it is unlikely that all companies will stick to the Work From Home (WFH) model once the pandemic subsides, it is equally unlikely that business will return to a rigid office model seen prior to March last year. Indeed, industry experts have predicted that a hybrid model, which mixes home and remote work as well as traditional and digital mediums, will dominate the workplace of the future. Here are some of the current trends and predictions regarding the future of the workplace:

DYNAMIC COLLABORATIVE SPACES

Pro-office workers often cite collaborative meeting spaces and in-person group work as a reason for shared office spaces. It is likely that the offices of the future will focus on collaborative meeting rooms. However, it is also likely that these meeting spaces will be significantly more tech-savvy than the conference rooms of the past and present. It is expected that all meeting rooms will have tech facilities that allow people to join the meetings remotely in a more advanced and succinct way than current channels allow. Indeed, as Bonan Sun, a designer at Gensler said in a recent report by the company: “[in the future] one person may be on a train while another is in their home office with a dual screen setup, and the rest in a room together with touch screen enabled worktables and large format displays. Traditional conference rooms that mimic our former in-person experience will evolve.”

SEAMLESS IoT IN THE WORKPLACE

While centralised offices are unlikely to be the only workspaces in the future, it is likely they will provide competitive advantages for those who do choose to commute in. As a 2020 report by Sceen Cloud notes, our workplaces are about to get “a whole lot smarter”. The company envisions this to be everything from improved health, safety and performance tracking to intuitive environments which respond in terms of temperature, light and the individual needs of each employee’s space.

AN INCREASE IN ROBOTIC TECHNOLOGY

The experts at ISG envision that the workplace of the future will be robotic, as well as human. The company anticipates a hybrid model which will move beyond smart technology, to one in which robotic technology takes on a great portion of company work. “ A hallmark of the workplace of the future will be human employees working side by side with digital ones,” explains ISG.

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Let’s say you’re in the market for an island holiday. Let’s say you settle on Palau, a popular Pacific archipelago to the north of Indonesia, to the east of the Philippines. You fly in and upon arrival, alongside an entry stamp, a pledge is printed into your passport: with it you’re promising the people of Palau you will ‘tread lightly’, ‘explore mindfully’. Before you exit the airport, you also sign your name to an agreement: you will not harm the country’s natural resources, nor exploit them.

Palau needs its tourists, yes, but the unfortunate price has been sustained damage to its coral reefs, heavy pollution and its tropical wildlife poached into extinction. And so, this pledge, an appeal to the tourist conscience. Bhutan takes it a step further. Tourists to the Himalayan kingdom must pay a daily sustainability fee of USD 65, a bulk of which goes to protecting its forests. That’s how, in spite of increasing tourism, Bhutan has become the first — and the only — carbon negative country in the world.

Palau, Bhutan — these are just two in a growing list of sustainable tourism models. The notion of offsetting the carbon footprint associated with tourism is gaining ground, and especially in the Middle East, where once oil-based economies are turning to tourism to secure their financial health.

SUSTAINABLE, REGENERATIVE TOURISM

But rather than supplementing with sustainable practices after the fact, Middle Eastern nations are developing tourism projects with sustainability at their core. Take Saudi Arabia, for instance, and its 92-island Red Sea Project. Not only will there be a cap on the number of visitors allowed in per year — one million instead of the ten it could accommodate — but also three-quarter the number of islands will be left untouched to protect endangered species.

As part of this development, Saudi Arabia’s Crown Prince has also announced Coral Bloom, home to the world's fourth-largest barrier reef system, untouched corals and several endangered species. Coral Bloom will take sustainable tourism a step further, into regenerative tourism, the practice of leaving a place ‘better than you found it’. Its design features the creation of new beaches and lagoons — enhancements that will raise the level of land and defend against rising sea levels.

And then there’s The Line, part of Saudi Arabia’s 500 billion-dollar NEOM smart-city project. Its architects have promised it will be a new type of city: not polluted, not pumping toxic emissions into the air, but a 170-kilometre belt of hyper-connected communities powered by green energy and carbon neutral.

REGIONAL DRIVE

Of course, Saudi Arabia is not alone in the sustainable tourism drive. Dubai’s 2040 Urban Master Plan aims to up its tourist area by 134 percent, its public beaches by 400 percent, and its green spaces — parks and nature reserves — will soon occupy 60 percent of the city. Public transport will also be made more accessible, under greater sustainability initiatives.

But according to a recent set of global rankings, when it comes to sustainable tourism in the region, it’s Jordan that tops the list, with Oman coming in second. Both nations boast a wealth of untouched heritage sites. Oman has also significantly upped the number of its eco-retreats, with many more in the works, including ones being built at the waterfront sustainable city project in Yiti, in Muscat.

Tourism is a double-edged sword: it accounts for 8 per cent of the world’s greenhouse-gas emissions, but also for 10 percent of its GDP. Sustainable, regenerative tourism is the answer to the tourism paradox, and Middle Eastern economies are now conscientiously integrating these models into upcoming tourist developments.

_{Photo credit: Kinshuk Bose on Unsplash}

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DRIVERS OF CHANGE: Top 20 most Influential Sustainable MENA Real Estate Professionals. You can nominate a peer, colleague, line report, or a key figure in real estate who is making a significant strides towards the MENA region’s green transition here.

As restrictions ease and the global distribution of the COVID-19 vaccines lead to global economic recovery and the reopening of travel corridors, Middle Eastern investors will once again target assets abroad. While the UK is a perennial favourite of investors from the region, the Netherlands and Germany are of particular interest, and even Central and Eastern European countries are becoming increasingly attractive.

A YEAR OF REAL ESTATE DISRUPTION

But, after a year of disruption, secure, long-term investments will be the order of the day.

Global real estate services provider Savills predicts that investors from the region will focus on regional markets in the UK and secondary European cities, prompted by low yields on assets in the continent’s major cities.

Nevertheless, London is unlikely to see a drop in residential investment from Arab buyers. Long regarded as a safe haven for investors, the city has been bracing itself for a rush of Middle East property buyers once travel restrictions are lifted.

PORTFOLIO DIVERSIFICATION

Another important shift has been a move towards portfolio diversification as investors look to immunise their portfolios against cyclical downturns. Middle Eastern investors are likely to target different types of real estate, especially emerging asset classes such as student accommodation, the private rental sector, senior living and healthcare.

And as e-Commerce sales jump, there may also be a move towards investment in existing logistics assets such as retail warehouses and distribution centres—indeed, a relative shortage of supply may even prompt investors to fund new developments.

According to Gulf Business, another notable trend is the increased importance of Middle Eastern private investors. Regional geopolitical uncertainty has led many to diversify into international markets for wealth preservation—this flow is sure to increase in 2021 and beyond.

Whatever happens, analysts are certain Middle Eastern investors will remain a key spoke in the international real estate sector once travel restrictions are lifted, with European cities remaining among the beneficiaries of property investment from the region.

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The two nations already boast a healthy economic relationship. In 2020—despite a dramatic drop in trade as a result of the Covid-19 pandemic—British exports to Egypt totalled £2.3 billion, with the Egyptians exporting £1.3 billion to the United Kingdom in return, according to the UK Foreign Office.

RELATIONSHIP BUILDING

In addition, the UK ranks first in the world for direct foreign investment in the Egyptian market, investing $5.4 billion in 1,1630 companies, the majority of which operate in the industrial sector.

With the IMF predicting high growth rates for the Egyptian economy, the British government is eager to encourage more investment in the country, with education, energy, electricity and healthcare among the areas most considered by UK companies.

The UK and Egypt signed a cooperation agreement in December, largely to ensure continuity of trade between the two countries after the end of the Brexit transition period.

Although the agreement focuses on industrial products, agricultural products, food products and fish, it has also ensured UK companies are able to continue investing in Egyptian infrastructure, industry and real estate.

EGYPT IS ATTRACTIVE TO INVESTORS

Egypt’s heavy recent investment in infrastructure is making the country an attractive destination for foreign investors, bolstered by heavy real estate demand from the country’s fast-growing population—now over 100 million. Major projects like the New Administrative Capital, part of the country’s ambitious “Egypt Vision 2030” demand substantial foreign direct investment. UK investors and companies will certainly be among those keen to take advantage of growing industrial real estate in particular.

Indeed, according to the Egyptian Businessman’s Association, real estate investment and urban development account for 16% of Egypt’s GDP, and the sector is set to receive significant foreign direct investment over the next 15 years. The new agreement between the UK and Egypt will ensure British investors are well-positioned to take advantage of this growth.

EXPAND YOUR REAL ESTATE KNOWLEDGE ON THE EGYPTIAN MARKET by attending The Cityscape Egypt 2021 virtual conference. Under the theme: Reset, Recovery & Rebound: A Plan for the Next Decade; local and international real estate experts will provide insights into Egypt’s future economy, the challenges and opportunities with Egypt’s New Cities, technology’s disruption of the real estate sector, role of co-working spaces in Egypt, the future metropolitan experience, architecture and built environment... To know more and register click here

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