The UAE has emerged a leader in the space of green buildings in the GCC, according to a recent global survey.

A survey of 373 corporate real estate professionals by Knight Frank ranked the UAE 14th globally for number of sustainable buildings.

The UAE was also the only country from the GCC to feature in the top 30, with 869 green-rated buildings. Amongst other GCC countries, Qatar featured at the 32nd rank, with 140 green-rated buildings, followed by Saudi Arabia at the 54th rank, with 38 green-rated buildings. With 12 green-accredited buildings each, Kuwait and Oman also featured in the rankings, at the 69th and 70th places respectively.

While a majority of Middle East respondents noted that less than 25% of their global portfolios were sustainable, three quarters of respondents confirmed that net zero targets will play a significant role in terms of decision-making in the real estate sector in the future.

The US emerged at the top of the league with about 81,000 green buildings. At the city level, London came at the top, with 3,000 environmentally accredited buildings.

TECHNOLOGY IS AN OPPORTUNITY FOR GREEN BUILDINGS IN THE GCC

"The climate crisis has spawned a global green reawakening and businesses in the Middle East are alive to the climate challenge," Head of Middle East research at Knight Frank, Faisal Durrani, said about the outlook for green buildings in the GCC.

According to Durrani, investors and businesses are giving increased consideration to the “green credentials” of buildings,  indicating that non-green-rated buildings are likely to perform poorly in terms of saleability and lettability in the mid-to-long term.

Further, pointing towards the Burj Khalifa’s condensation harvesting system, Durrani noted that both developers and landlords have taken a tech-forward approach to green buildings in the GCC. At the same time, adoption of these technologies needs to be scaled widely to encourage competition amongst green businesses, Durrani added.

According to an earlier report by Knight Frank, Andrew Love, Partner and Head of OSCA Middle East, pointed towards government initiatives such as Estidama regulations in Abu Dhabi, Green Building regulations in Dubai, Qatar’s Global Sustainability Assessment System, and Saudi Arabia’s green codes, to promote green buildings in the GCC.

This is further boosted by national-level goals, such as transitioning to 50% renewable electricity by 2030 in Saudi Arabia, or deriving 50% of energy from clean sources by 2050 in the UAE.

Green buildings in the GCC are likely to become more integral to real estate businesses going forward, Love added, with pressure on private and semi-private developers to undertake sustainable construction, building design, and energy management.

_{Photo credit: www.commercialinteriordesign.com/portfolio/top-10-sustainable-developments-in-the-gcc}

 

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Architecture firm Skidmore, Owings and Merril (SOM) recently unveiled new preliminary designs for the State/Lake station and Red Line Connection in downtown Chicago. 

The State/Lake station is the second busiest station in the Chicago Transit Authority (CTA) network and has two platforms. This ‘L’, or elevated, station is located at a junction in the Chicago Loop, serves six of Chicago’s eight train lines, and is also connected to pedestrian and bus routes.

The CTA is joined by the Chicago Department of Transportation, and the City of Chicago, as commissioners of the State/Lake station project.

"In addition to accessibility, this project also demonstrates our commitment to the full revival of the Loop—which is the economic engine and cultural hub of our great city,” Lori Lightfoot, Mayor of Chicago, said.

IMPROVED SAFETY, ACCESSIBILITY, AND LIGHTING AT THE NEW STATE/LAKE STATION

Working along with TranSystems and a local consultant team, SOM’s new design proposes wider and safer platforms, a glass canopy over the station, an accessible fly-over bridge, elevators to the elevated and Red Line platforms, and street-level public realm enhancements.

The glass canopy will feature a bird-friendly frit pattern for protection from the weather. Meant to permit daylight into the station, the canopy draws inspiration from Chicago’s bascule bridges and skyscrapers, including the John Hancock Center and Willis Tower.

The canopy will provide sweeping views of the State Street corridor, including the Chicago Theatre marquee, historical buildings, and architectural landmarks. Further, historic materials currently in place at the station will be functionally integrated into the design.

At the western end of the State/Lake station, a glass and metal-clad bridge will be put in place to connect elevators and stairs for improved accessibility, in addition to widened platforms and an increased number of exits.

The design also involves structural improvements at the station’s intersection. This includes removing any obstructive columns, improving safety parameters for traffic along State Street, upgrading street-level lighting, widening street corners, improving pedestrian crossings, and connecting the State/Lake station to the north plaza.

“The new State/Lake station will be a gateway to downtown for Chicagoans and visitors alike,” Scott Duncan, SOM Design Partner, said. “As one of the most visible stations in the CTA network, the design is reflective of both its location and the needs of riders, with a soaring glass canopy, comfortable spaces for passengers, and fully integrated accessible design for riders of all mobility levels.”

_{Photo credit: www.bdcnetwork.com/som-redesigns-chicago%E2%80%99s-statelake-station}

 

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Online food delivery company Deliveroo recently launched its third cloud kitchen in Dubai, the Deliveroo Editions hub. Located on Hessa Street, the property is one of Deliveroo’s largest cloud kitchens in the world, the company said.

The kitchen will undertake menu preparations for over a dozen restaurants on Deliveroo’s platform, catering to customers in Al Quoz, Arabian Ranches, Al Barsha South, Jumeirah Village Circle, Studio City, Sports City, IMPZ, Motor City, and Madinat Jumeirah.

“Editions kitchens have proven to be a great way to help our restaurant partners expand without the up-front investment,” Anis Harb, general manager for the Middle East at Deliveroo, said about the launch.

Cloud kitchens are a rising trend in the global F&B market, with the pandemic upending traditional business models in this industry, while online order volumes continue to grow (Deliveroo saw orders grow by 114% globally in Q1 2020).

HOW DO CLOUD KITCHENS OPERATE?

Cloud kitchens operate across three broad models in the UAE. These are virtual restaurants, which are online-only B2C or B2B restaurants selling via third party delivery apps, kitchen-as-a-service operators, offering cloud kitchen space to food brands, and full stack F&B service providers, who undertake everything from order to delivery.

The industry is gaining popularity as a real estate investment play, since much of the operational success in this space depends on rents, cost of delivery, and accessibility of delivery routes.

THE UAE OPPORTUNITY 

A report by POSist and Dubai Restaurants Group found that 75% of UAE-based restaurant operators expect to see revenues reach pre-Covid levels. Meanwhile, 70% confirmed that they were looking to set up cloud kitchens or delivery-only brands, while a third expected over 60% of their revenue to come from food delivery this year. 

Investments in this space could help F&B outlets increase unit growth, making up for lost revenues while preparing for pandemic-related uncertainties, the report said.

The UAE has over 400 cloud kitchens, mostly based out of Dubai. Seeing the opportunity in this space, several restaurant operators have repurposed existing facilities into cloud kitchens, or have switched to third-party cloud kitchen operators.

At the same time however, the boom in cloud kitchens in the UAE is pointing towards a risk of overcrowding. The sector can eventually expect to see some consolidation in the future, along with a few closures.

 

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Two facts present themselves. On the one hand, Dubai’s residential real estate has been in a bear market for several years. Yet, on the other hand, transaction volumes in 2021 have picked up and segments of the housing market are performing strongly. Dubai Land Department’s quarterly index showed, for instance, that the price of villas and townhouses increased by almost 5% in the six months ending March 31^st 2021.

The obvious next question is whether the bear market is over for good and, related to this, whether prices will start to increase across all market segments. While there has been a lot of talk about frenetic activity at the high-end of the residential sector, Dubai Land Department is still reporting price declines in the broader apartment market.

The market fundamentals remain difficult to read. After all, even as the economy rebounds from COVID-19, overall output remains below pre-pandemic levels. Furthermore, across the UAE, real estate markets are still dealing with population outflows following the pandemic-induced economic shock to the country’s service-oriented sectors (such as hospitality). While, from a UAE perspective, general government finances are looking sound again with the oil price hovering around USD 70 a barrel, it would be unwise to expect the government to open the fiscal taps. Abu Dhabi, the main source of budget spending in the UAE, has clearly shown its commitment to long-term fiscal sustainability.

We cannot therefore assume that housing market fundamentals are unambiguously positive; all we can say is that things are getting better and stabilising, rather than necessarily ‘powering ahead’. But real estate is as much about sentiment as about fundamentals; especially in a residential market like Dubai’s which attracts high levels of foreign capital, and where a relatively small shift in local preferences from renting to buying can have an outsized market impact.

This is where Peninsula Real Estate’s home sentiment survey, conducted in partnership with Cityscape Intelligence, can provide a great deal of valuable information. It is an opportunity to obtain a clear view of what homeowners and renters think will happen to the market in the future.

Our previous Q4 2020 survey surprised many by showing a dramatic improvement in homeowner sentiment. Only 27% of homeowner respondents reported expecting prices to continue to decline during 2021; while 30% expected price stability, and 43%, the largest group, expected prices to increase. To put this turnaround in perspective, at the end of Q3 2020, 50% of respondents expected prices to decline in the following 12 months.

Our last survey provided an excellent early look at how homeowners were viewing the market in 2021. By clicking here and filling in our latest survey, you will help us all gain a better understanding of whether the turnaround will gather strength or run out of steam.

 

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Dubai-based Arcadia High School, designed by Godwin Austen Johnson, is the first school in the Middle East to be awarded the LEED V4 (Leadership in Energy & Environmental Design) Gold certification.

It was awarded 62 points by the U.S. Green Building Council (USGBC) making it the fourth highest ranking school outside of the USA.

Completed in 2020 The Arcadia High School, located in Dubai’s Jumeirah Village Circle, covers a total teaching space of 7500 sqm including classrooms, shared learning and labs. The ancillary facilities which includes the library, music and dance rooms cover an area of 1500 sqm.

Drawing inspiration from Arcadia School, the primary school completed by GAJ in 2016, the secondary school’s reception is bright and airy opening out into a large casual seating zone with a unique 12 metre high indoor climbing wall feature. The inclusion of the wall was designed to reinforce the school’s ethos of transparency and its desire to ensure students play a highly visible and interactive role in their education.

“The Arcadia High School is a prime example of sustainable design and construction and we are thrilled the project has been awarded LEED Gold certification,” said Jason Burnside, partner, Godwin Austen Johnson. “Throughout the project our aim was to put in place a whole raft of sustainable measures including a thermally insulated building envelope, LED lighting with daylight/motion sensor controls and a high performance water cooled oil-free magnetic bearings chillers.”  

LEED is a globally recognised symbol of excellence in green building. LEED certification ensures electricity cost savings, lower carbon emissions and healthier environments where people live, work, learn and play. In the United States alone, buildings account for almost 40 percent of national CO2 emissions, but LEED-certified buildings have 34 percent lower CO2 emissions, consume 25 percent less energy and 11 percent less water, and have diverted more than 80 million tons of waste from landfills.

LEED projects earn points by adhering to prerequisites and credits across nine measurements for building excellence from integrative design to human health to material use. The LEED rating systems work for all buildings at all phases of development and are meant to challenge project teams and inspire outside-the-box solutions.

 

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The International Monetary Fund (IMF) has completed its second review of the reform program for Egypt’s economy, and has subsequently allowed a financing of SDR 1.158 billion, or USD 1.7 billion. The financing is supported by a 12-month Stand-By Arrangement (SBA). With the announcement, the total funding provided under the SBA has now reached USD 5.4 billion, 184.8% of quota.

The Executive Board of the IMF also concluded consultations under Article IV of the IMF's Articles of Agreement on Egypt’s economy. The IMF conducts bilateral discussions with member states on national economic development and policies under Article IV. The next consultation is likely to take place next year. 

Commending Egypt’s efforts in managing balance of payments needs and macroeconomic stability due to the pandemic, the IMF noted that reforms since 2016 allowed the country to build sizable reserves to support it during the pandemic.

IMF: EGYPT'S ECONOMY EXPECTED TO ACHIEVE 5.2% GROWTH NEXT YEAR

For the financial year ended 2021, the IMF anticipates that Egypt’s economy will reach 2.8% in growth, and 5.2% for the year ended 2022, boosted by fiscal and monetary policies. At the same time, high public debt levels and gross financing needs still bring a degree of economic uncertainty to the long-term outlook for Egypt’s economy.

Meanwhile, real estate in Egypt is expected to become the largest contributor to the country’s GDP in the next 15 years, bolstered by the National Investment Law, Vision 2030, and an increased urbanisation drive in the country.

According to a JLL report, Egypt’s real estate sector emerged as a success story for the MENA region this year, despite the challenges of the pandemic. Structural reforms and a flexible approach were able to help the country absorb the shocks of the pandemic to Egypt’s economy, while propping up its real estate sector.

Going forward, achieving growth potential would entail deep and broad structural reforms, and inclusive sustainable private sector partnerships, the IMF said, pointing to a need for better governance, stronger social protection, improved business environment, deepened financial markets, and greater integration with global trade.

“The budget target for FY2021/22 strikes an appropriate balance between supporting the recovery and keeping public debt on the projected path. The envisaged pickup in growth should allow a return to the pre-crisis primary surplus from FY2022/23 to put public debt back on a firmly downward trajectory,” Antoinette Sayeh, Deputy Managing Director and Acting Chair at the IMF, said.

 

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Student housing in the UAE finds its place among other niche real estate investment areas that are gaining traction, such as flexible spaces and senior housing, according to CBRE. While the market is still in its early days, government initiatives are expected to drive future demand in this segment.

Further, CBRE anticipates the traditional student accommodation layout to be reconfigured due to social distancing, with larger rooms, including single occupancy and co-living options, and common areas. Virtual tours, and contactless services, requests and access to premises, may also make their way to this segment.

Globally, student housing has grown by 87% in the last five years up to 2020, and has emerged as a lucrative alternative real estate investment class. Countries such as the US and the UK have seen great success with this asset class, with purpose-built student accommodation (PBSA) addressing the accommodation needs of 34% of the UK's student population.

For the UAE, where the market is still early, student housing is a niche but promising opportunity for alternative real estate investment.

STUDENT HOUSING: AN EMERGING REAL ESTATE INVESTMENT TREND

A previous report by CBRE expected approximately 8200 student beds to be available by the end of 2020. Most student housing in Dubai consists of off-campus residential buildings in Dubai Silicon Oasis, International City and Dubai Land. Some non-affiliated off-campus student housing is also available, but the supply of PBSA developments is limited.

At the same time, PBSA developments are expected to grow with demand for affordable student housing. This demand is expected to be boosted by government initiatives, such as extended student visas, federal funding (UAE allocated 17% of its budget, or AED 10.2 billion to education in 2019), a growing population, and an expansion of higher education institutions.

Several large projects catering to the demand for student housing have been recently launched or are in the pipeline, highlighting the real estate investment potential of this market.

The Myriad Dubai, for instance, is an urban student living community located at Dubai International Academic City. It opened in September 2020, and is currently home to students of over 45 nationalities, including UAE citizens from 30 different Dubai and Sharjah-based institutes.

Elsewhere, Arada recently awarded an AED 367 million contract for Nest, an integrated student housing complex in Sharjah’s Aljada community by Arada. Located at a distance of 10 minutes’ walk from University City, Nest is a smart living concept consisting of 12 five-storey apartment blocks.

_{Photo credit: https://www.themyriad.com/destinations-dubai/}

 

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Amidst Middle Eastern cities, Abu Dhabi and Dubai have moved up on The Economist Intelligence Unit’s Global Liveability Index 2021, Upasana Dutt, Head of Global Liveability, said at a recent webinar.

The ability to close international borders quickly, handle the health crisis, and roll out vaccination campaigns at a quick pace greatly determined the rankings of the index. Overall, medium sized cities and wealthy countries continue to dominate the rankings.

The index compared over 140 cities and 30 qualitative and quantitative indicators, spread across five categories – stability, healthcare, culture and environment, education, and infrastructure.

Overall, the average liveability score fell by seven points relative to the pre-pandemic period, Dutt noted about the survey. While Australasian countries dominated the rankings, Western Europe's average liveability score fell by nine percentage points, followed by Eastern Europe, North America, and Latin America.

LIVEABILITY IN THE MIDDLE EAST

In the MENA region, the trend for cities continued to fall due to regional instability. However, Middle Eastern cities fared comparatively well when compared to their MENA counterparts, where unrest and instability continues to affect rankings for cities such as Damascus and Tripoli

Cities in the Middle East tend to score higher in the rankings for stability, Dutt noted. This is particularly due to low crime rates. At the same time, there is some pressure on their scores for culture and environment. For instance, Riyadh and Jeddah have similar stability rankings to that of New York when it comes to stability, but score low on cultural ratings. 

In the UAE, both Abu Dhabi and Dubai also score high on stability factors, and moved up the liveability rankings this year. A fall in percentage points for many European cities was one of the factors playing into this development, Dutt said.

“Between Abu Dhabi and Dubai, Abu Dhabi's doing little better on account of healthcare cases when we were running the survey, otherwise they score pretty neck to neck, on an average basis,” Dutt further said.

Overall however, a lot of the changes in the liveability rankings are “transient and temporary,” Dutt continued. Much of the “erosion” in the rankings is likely to be overcome as vaccination programs are rolled out.

Overall, Abu Dhabi remains the most liveable city in the Middle East region for the second year in a row, and has also moved up seven places on the ranking. Its position was greatly helped by the emirate’s response to COVID-19, the best of its kind in the world. 

 

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Westminster City Council, the municipal author of the City of Westminster in London, recently announced a transformation plan for Oxford Circus. The junction will be converted into two, pedestrian-friendly piazzas that will be designed through an international design competition.

Work on Oxford Circus is slated to start later this year, with the delivery of the piazzas on Oxford Street targeted for the end of 2021. It will entail improvements to public spaces in and around the area for more leisure and recreational activities. Westminster City Council will be undertaking additional planting and seating, and will also work with Transport for London to enhance access to the Oxford Circus tube station.

So far, Westminster City Council has committed about USD 209 million to the project.

A GREENER AND SMARTER OXFORD CIRCUS

The transformation is aimed at reviving Oxford Street and the West End as a “world-leading, forward-facing, urban space” that is greener and smarter.

Plans include “Experimental Traffic Orders” to close roads between Oxford Circus and Gt. Portland Street to the East, and Oxford Circus and John Princes Street to the West, as pedestrian-first zones.

Westminster City Council announced that the RIBA International Design Competition will be launched in summer this year for the final scheme of the project. The Royal Institute of British Architects will be running the fully open global competition.

“There is an urgent need to tackle issues with pedestrian congestion and safety, poor air quality and noise. The serious congestion of Oxford Circus, of people and of traffic, is unsustainable and demands action,” Westminster City Council Leader Rachael Robathan said. “We hope the creation of these pedestrian-only piazzas at Oxford Circus will not only improve safety, security, accessibility but create an iconic destination at the heart of London.”

The move also looks to accommodate commuters who are likely to arrive at the district on account of the newly built Elizabeth Line. Traffic will be routed along Regent Street, across the north and south of Oxford Circus.

Overall, the transformation of Oxford Circus is aimed at managing pedestrian density, improving air quality, reducing vehicle traffic, and improving the network of buses and experience of cyclists across the area. It also takes into account changes in shopping and working patterns due to COVID-19, looking to create a hub for innovative retail, commercial and recreational activities.

_{Photo credit: www.dezeen.com/2021/06/23/oxford-circus-car-free-pedestrian-piazzas-competition/}

 

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In a report on the outlook for real estate in Saudi Arabia, CBRE noted that multiple initiatives, helmed by the country’s Vision 2030 agenda, are expected to drive economic diversification and economic growth.

These include the Saudi Arabia Green Initiative to reduce emissions, the Shareek program that aims to drive investments of USD 1.3 trillion by 2030 through public-private partnerships, increased activity by the Public Investment Fund, and real estate tax reforms.

Here are the top trends from the report:

INCREASED OWNERSHIP IN RESIDENTIAL REAL ESTATE IN SAUDI ARABIA

Saudi Arabia’s Ministry of Rural Affairs and Housing has offered financing and housing solutions to increase home ownership rate to 70% by 2030, in line with Vision 2030. Millennials have emerged as a key demographic in this space. Further, work-from-home and social distancing norms continue to put the focus on smart homes, larger unit sizes, and well-supported staff and labour accommodation projects for residential real estate in Saudi Arabia.

OFFICES TO ACCOMODATE REMOTE WORKING

Companies will need to find a mix of both traditional and flexible office spaces to optimise occupational strategies and portfolios for the hybrid working trend. Flexible lease terms and structures are likely to gain more approval. The Saudi government is also introducing initiatives to boost innovation and technology for the future of the workplace. Supply of Grade A units for office real estate in Saudi Arabia is expected to increase substantially in the next 1-2 years.

ADAPTING THE RETAIL MODE FOR ECOMMERCE 

Retail will need to shift to more flexible, omnichannel, and tech-enabled models. While the physical retail experience remains in place, online shopping and ecommerce trends are changing expectations nonetheless. Local ecommerce players continue to grow their market cap, while “signature assets” to be delivered in the next 1-2 years are expected to make way for more attractive leasing opportunities within retail real estate in Saudi Arabia.

CHALLENGES REMAIN FOR HOSPITALITY

Reductions and rationalisations will continue as the hospitality industry contends with prolonged closure of borders. Recruitment of skilled local talent is still a challenge for the sector, but investor confidence remains put, braced by government initiatives such as the Red Sea project and AlUla.

MIXED BAG FOR REAL ESTATE IN SAUDI ARABIA IN THE INDUSTRIAL AND LOGISTICS SECTOR

The industry and logistics sectors can expect a boost from the National Industrial Development and Logistics Program. Further, infrastructure improvement projects for air, rail and road are in the pipeline, along with the establishment of eight special economic zones by 2030.

Food security and cold storage space, and fulfilment and distribution facilities, are expected to be in top demand, while secondary assets will continue to face pressure on occupancy and rental rates.

Photo credit: www.worldfinance.com/wealth-management/saudi-arabias-vision-2030-plan-spurs-international-investment, www.qiddiya.com

 

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