Construction has long been highlighted as one of the least digitised industries, despite the benefits of digitisation on efficiency, and cost management.

One study found that digitisation of construction could save up to USD 1.7 trillion in construction, engineering and design costs within a decade. Technologies such as building information modelling, 3D printing, cloud, autonomous equipment and wireless sensor technologies could increase efficiencies across the construction value chain.

The reason digitisation of construction has not taken place at scale, is that construction projects tend to be highly complex, and involve multiple stakeholders. For an industry that has so many moving parts, wide-scale digitisation can be challenging to implement.

However, with technological disruption taking place aggressively across industries, digitisation is no longer a nice-to-have, and the construction industry is coming onboard.

DIGITISATION OF CONSTRUCTION IN THE MENA REGION

In a recent study by MEED and Autodesk, 100% of respondents surveyed agreed that digitisation of construction improved project delivery, while over half noted that it would have the most substantial impact on project management and performance.

Meanwhile, about a third of the respondents also said that digitisation would bring benefits of speed of delivery, accuracy and collaboration to the construction industry.

The UAE has emerged a leader in the space of digitisation of construction. It was the first in the region to adopt building information modelling in 2013, and a growing number of companies in the country have switched to drones for mapping, surveying and monitoring projects. The UAE is also home to the first ever 3D printed building in the world.

Elsewhere in Saudi Arabia, projects such as NEOM, Qiddiya city, and the Red Sea Project are expected to drive digitisation in the construction industry

“These are ambitious projects that cannot be effectively delivered through traditional methods. The time, cost, quality and sustainability improvements offered through digital ways of working at scale becomes a very compelling reason for change,” David Glennon, digital delivery director at the Red Sea Development Company, said in the report.

AREAS OF INTEREST

Technologies such as cloud computing, driven by software as a service (SaaS) business models, are also gaining traction within the industry. Mobile apps, Internet of Things-based equipment, drones, and augmented reality are some other areas of interest in the digitisation of construction.

Moreover, data science technologies, such as Geographical Information Mapping and ‘digital twins’, are also becoming an emerging trend, particularly in Saudi Arabia.

Overall, respondents of the survey noted that digitisation of construction was most likely to positively impact site execution, design development, and operations and maintenance functions.

 

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Golden visas, or citizenship by investment, has been gaining precedence across the GCC, the Caribbean, and Europe as well.

Nearly half of all member states of the EU offer citizenship by investment, according to a report by the LSE. Individuals can park about EUR 250,000 in real estate investments, bank deposits, or government bonds to apply for a golden visa.

But the schemes have been shrouded by controversy and questions since the last few years, with countries imposing strict policy regulation.

A SNAPSHOT OF CITIZENSHIP BY INVESTMENT IN THE EU

In the EU, about 40,000 applications for citizenship by investment have been approved over time, the report by LSE noted. However, the actual number of people gaining residence is higher — over 100,000 – as each applicant is associated with an average of 1.6 family members. The interest mainly comes from individuals from China and Russia, followed by Brazil, Turkey, Ukraine, South Africa, Iran, Egypt, Lebanon, Iraq.

The figure is not too prominent representing just about 1% of long stay residence permits. In countries such as Greece and Portugal, however, they can represent over 10% of residence permits. Meanwhile, most EU member states approve fewer than 500 applications each year, whereas countries like Estonia, Luxembourg, and the Netherlands, have approved less than a dozen people in total.

Citizenship by investment is mostly popular in Portugal, Spain, Latvia, and Greece, which account for 70% of total approved applications, and 60% of revenue from the schemes.

TROUBLE IN PARADISE?

While popular, it’s not all smooth sailing for citizenship by investment programs. In 2020, the European Commission sent legal notice to Cyprus and Malta for their golden visa schemes in a move that may eventually see the two island nations end up in court and face fines.

It further sent a reasoned opinion to Cyprus for failing to address concerns earlier this month, as well as a letter of formal notice to Malta, which established a new scheme for investor citizenship at the end of last year.

These schemes are not popular with the European Commission due to concerns about security risks, money laundering, tax evasion, and other corruption-related issues.

Citizenship by investment schemes allow approved applicants to move, live and work freely within the EU, and also give them the right to vote in municipal and European Parliament elections, the European Commission has previously pointed out.

“The granting of citizenship of the Union in exchange for a predetermined payment or investment and without the persons acquiring citizenship showing any real link with the Member States concerned undermines the profound nature of EU citizenship,” it also said.

 

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The Central Bank of the UAE (CBUAE) recently released its Financial Stability Report 2020, noting that the UAE economy is expected to grow by 2.4% in 2021, with non-oil GDP projected to grow by 3.8%.

By 2022, the CBUAE further expects a full recovery, with total real GDP growing by 3.8%, and non-oil real GDP by 3.9%.

Last year, the country’s GDP fell by 6.1% owing to the economic shocks of COVID-19, including a downward trend in real estate prices, and the OPEC+ agreement to reduce crude oil production.

In order to support different economic sectors last year, including UAE real estate, the CBUAE announced the Targeted Economic Support Scheme, or TESS. 

As part of the scheme, the required mortgage down-payment on owner-occupied residential properties was reduced by 5 percent points for first-time buyers. As a result, mortgage portfolios in the banking sector grew by 8.1%, as compared to 2.7% in 2019.

Here’s what the CBUAE forecast for the UAE real estate market in the country in its latest report.

CBUAE’S REPORT ON UAE REAL ESTATE LAST YEAR

The report noted that residential real estate sales and rental prices in Abu Dhabi and Dubai continued to decline last year, whereas supply of residential real estate reached around 2,900 units in Abu Dhabi, and 38,900 units in Dubai.

During the year, residential sales prices dropped by 2%, and residential rental prices by 4.3%, in Abu Dhabi. In Dubai, they fell by 5.5% and12.2% respectively. Yields also dropped in Dubai, but picked up slightly in Abu Dhabi, the CBUAE report said.

The number of sales transactions in Dubai also dropped by 15.6%  due to a decline in sales of properties under construction. Further, the number and value of off-plan properties in the emirate also dropped sharply by 31.9% and 37.3% respectively.

Elsewhere, work from home models and closure of international borders led to a slowdown in the commercial real estate market, the CBUAE reported. In Abu Dhabi, office rents dropped at 1.9% (as compared to 4.3% in 2019), whereas in Dubai, they dropped by 7.5% as compared to 6.1% in 2019. Meanwhile, the average hotel occupancy rate in Dubai and Abu Dhabi fell to 54% and 66%, much lower than the 5-year historical average.

Lending to the UAE real estate sector slowed marginally — 7.4% in 2020 as compared to 7.9% in the previous year. Residential properties dominated the UAE banking system’s portfolio of UAE real estate loans, followed by commercial buildings, and real estate developers. Hotels, entertainment and leisure, shopping complexes and labour camps, and working capital altogether took up about a quarter of the portfolio exposure.

 

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While 2020 was a tough year on the UAE real estate market, luxury real estate in the residential market has become the light at the end of the tunnel.

Luxury real estate started to pick up in 2020, with an increase in demand for luxury affordable units. The UAE has continued to become an attractive destination for buyers to purchase a luxury home, and a rise in demand is expected to bolster sales in this market.

POSITIVE SIGNS FOR LUXURY REAL ESTATE IN THE UAE

The luxury real estate market is currently seeing interest from Indian businessmen due to the second wave of COVID-19 in India, in addition to steep taxation rates for high net worth families. This demand is further prompted by recent policy-level initiatives by the UAE government, including new residence visa options and full foreign ownership of businesses located in the country.

These reforms, along with attractive mortgage rates in the real estate market, have shown promising signs of recovery in the country’s property market. In March 2021, wealthy home buyers purchased a record 84 luxury homes, worth over USD 2.7 million.

Further, although apartment prices continued to fall in the previous month, prices of high-end villas stabilised with an upward trend in the sale of luxury villas, along with sea-view apartments and second-hand family houses. Prices of villa properties rose 3.9% in the first quarter of the year.

Further, ultra-luxury real estate deals reportedly reached USD 68 million in transactions in Q1 2021, pushed by surging demand in this segment from wealthy buyers and investors who are keen on secondary markets.

LUXURY PROPERTIES IN THE PIPELINE THIS YEAR

Several luxury properties have already been announced this year, including an apartment complex located in Sharjah’s Aljada by Arada. The developer awarded a contract for USD 49 million to develop three high-end apartment blocks in the community to Dubai-based Al Ashram Contracting.

Dubai also announced the world’s first Sea Palace Floating Resort near Dubai Marina. The project comprises a hotel and six floating glass boat villas, priced at about USD 5.5 million each. The villas have been licensed as yachts, and will consist of two floors, with a balcony, and an outdoor swimming pool on the roof.

Further, Nakheel and Select Group also announced plans for the development of branded luxury homes and a boutique hotel on a beachfront plot in Palm Jumeirah’s West Crescent.

_{Photo credit: www.aljada.com/en/discover/residences/misk-apartments,} 

 

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The UAE startup ecosystem witnessed a growth of 72% in venture capital funding in the first quarter of 2021, a recent report by Magnitt said. 

While deal numbers declined by 28% compared to Q1 2020, the growth in venture funding indicated signs of recovery from the economic shocks of COVID-19, the report noted.

Meanwhile, venture capital investors headquartered in the UAE accounted for 40% of total active investors in the UAE startup ecosystem, with international investors dominating the pool. Investors based in Saudi Arabia and the USA comprised 18% of total active investors. 

FINTECH DOMINATES VENTURE CAPITAL TRENDS IN THE UAE STARTUP ECOSYSTEM

In addition to the drop in deal numbers since Q1 last year, total transactions also accumulated to less than the two-year average. Despite this, one in every four venture capital deals in the MENA region went to the UAE startup ecosystem in Q1 this year, making the country the region’s top funding destination by deal count.

The fintech industry claimed the most number of deals in the period, and was also the third most funded sector. This is in line with the trend across the MENA region, where fintech investments reached a three-year high, growing 163% year-on-year.

The UAE remains a hub for fintech in the MENA region, with the most number of fintech startups – 166 – based in the country. Fintech startups secured an average of USD 3.5 million in ticket size, slightly above the USD 3 million average across the MENA region.

E-commerce deals, on the other hand, witnessed a steep year-on-year drop in deal numbers, with a decrease of 71%.

About 67% of all venture capital deployed in the UAE Q1 2021 went to the top five deals, the report said.

“As startups continue to mature and reach scale, they have become more interesting for international investors who have shown continued interest in the MENA region. Success stories like Souq, Careem, and Instashop have highlighted the exit opportunities and increased opportunities in the region and we expect this trend to continue into 2021,” Philip Bahoshy, CEO of Magnitt, told The Khaleej Times.

Last month, MENA startups raised a total of USD 110 million in venture capital funding. About 25.8% of this, or USD 28.4 million, came from seven UAE-based startups. Further, the UAE startup ecosystem also saw an acquisition take place, with Australia-based buy now pay later (BNPL) company Zip acquiring UAE BNPL startup Spotii.

 

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Designs for a new multi-generational, health-focused, and sustainable residential development called The Forestias were revealed last month. Situated in the outskirts of Bangkok city, the development aims to connect contemporary city life in Thailand with traditional concepts of health and wellbeing.

The Forestias is designed around themes of community and multi-generational family co-living, nature (for healthier urban living), and smart cities, incorporating  autonomous vehicles, smart meters and sensor networks as well.

Foster + Partners undertook design of the project through its Thai subsidiary F&P (Thailand) Ltd.

A CLOSER LOOK AT THE FORESTIAS

The project site has been divided into two zones. City level public functions are concentrated in the North zone, and the South zone will be dedicated to residential properties.

A forest can be found at the heart of the development, while a range of planted areas and green spaces will surround the region. 

The main entrance will feature a Forest Pavilion, which acts as an ‘experience centre’ for The Forestias lifestyle through immersive and interactive experiences. It will include a canopy walk on an elevated platform leading into the central forest, and will connect the North and South zones as well.

The residential South zone will involve a variety of housing options, including high-rises and villas. Properties include three ‘Whizdom’ high-rise buildings featuring condominiums for smaller families, ‘Mulberry Grove’ low-rise condominiums ‘Mulberry Grove Villas’ cluster-home residences for larger, multi-generational families, ‘The Aspen Tree’ residences designed around lifetime care services for older residents, and the ‘Six Senses’ super luxury villas.

Residential spaces are aimed at building a sense of community at The Forestias. Hence, boundary walls and hedges have been visually reduced, and shared facilities have been incorporated into the project. Neighbourhoods are focused on creating “an infinitely extendable diagram of buildings and social spaces.”

At the Mulberry Grove villa properties, for instance, the courtyard serves as the heart of every home. Moreover, streets in The Forestias intersect at plazas for each neighbourhood, and several neighbourhoods collect at a larger public space with shared resources.

“The Forestias masterplan takes inspiration from the layout of traditional Thai houses to create a contemporary interpretation in the form of flexible community spaces, focussed on health and nature, that can expand and adapt as the needs of the family grow,” Sunphol Sorakul, Partner and Director, F&P (Thailand) said about the project.

_{Photo credit: https://mqdc.com/our-business/theme-project/theforestias, www.fosterandpartners.com/news/archive/2021/05/the-forestias-bangkok-s-new-multi-generational-health-centred-sustainable-quarter-launched/#main}

 

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The GCC’s healthcare sector has shown “solid growth” in the past few years, driven by investments in hospitals and infrastructure, according to a research report by Mashreq bank and research firm Frost & Sullivan.

The GCC’s healthcare sector registered the highest growth worldwide in the last decade, the report said. At the same time, COVID-19 has changed industry-level trends, opening up new real estate investment opportunities that are expected to persist well into the second half of 2021.

Overall, investments in the GCC’s healthcare sector are expected to reach USD 89 billion by 2022. With real estate investments in healthcare also expected to increase, this could entail portfolio additions as investors brace for a quicker recovery and long-term growth potential.

HEALTHCARE REAL ESTATE INVESTMENT OPPORTUNITIES

Part of the investment emphasis is on extended care infrastructure, and private players are expected to boost market growth in the next three to five years.

About 7% of the population in GCC countries is aged 60 years and above, with the ageing population the region set to grow rapidly. In the next decade, those aged 60 years and above will compose 20% of the population.

This demographic accounts for around half of all visits made to healthcare facilities, with a demand for long-term care (LTC) beds. Saudi Arabia, for instance, faces a gap of over 12,000 LTC beds. While government initiatives across the GCC have been announced to increase the number of beds by 24,000 over the next 10 years, just about 14% of this capacity was achieved in 2020.

The market for extended care services in the GCC is expected to be worth USD 3.46 billion by 2025, growing at an annual rate of 12%. Saudi Arabia and UAE are expected to account for most of this growth, representing around 76% of forecasted market revenues. 

Oncology is another bright spot for real estate investment opportunities in the GCC, driven by the need for capital equipment, cancer specialty hospitals, and multi-specialty private hospitals with cutting-edge technological infrastructure. Currently, about 30-40% of capital equipment for cancer imaging have been in use for over seven years, and major advancements in this space are yet to come.

Further, private sector real estate investment opportunities for hospitals and clinics providing mother and childcare services are opening up. While this space is mostly dominated by exclusive, public sector-established maternal health hospitals and clinics, private sector participation in this space is expected to grow by 2025.

 

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Middle East investors are expected to show strong interest in Central London’s OWO Residences by Raffles.

“There is no doubt in my mind that there will be a good level of international demand and by that, I mean, predominantly focused on the GCC and also Asia as well,” Arabian Business reported Charlie Walsh, head of residential sales and marketing, as saying.

London is popular with GCC buyers as a location for primary or secondary homes, Walsh said, adding that lockdown restrictions in the UK have resulted in several months of pent-up demand. Potential buyers have already lined up for virtual viewings and initial reservations, Walsh added.

The first Raffles-branded residences in Europe, OWO Residences is located beside The OWO in Whitehall. The property features 125 rooms and suits, 85 residences, nine restaurants and bars, a destination spa, and boutique retail as well. The OWO is expected to be completed next year.

WHAT IS THE OWO?

The historic building was originally built in 1906, and was previously known as the Palace of Whitehall. It was featured in the James Bond series of films, and in British television drama The Crown as well.

Raffles signed an agreement with The Hinduja Group and Obrascon Huarte Lain Desarollos to operate the flagship hotel in 2017. The latter two parties had announced plans in the same year to restore and redevelop the building. 

In 2020, Raffles was signed on to operate OWO Residences as well, with the whole project being named The OWO at a topping out ceremony.

UK-based EPR Architects has provided design services for the project, with hotel interiors by New York-based designer Thierry Despont, and residence design by 1508 London.

OWO Residences is located adjacent to the hotel. Units will be sold unfurnished. The residences feature bespoke kitchens by Smallbone of Devizes, Waterworks brass ironmongery and Onyx marble. Some properties will also retain heritage features, such as oak panels and mosaic floors.

OWO RESIDENCES ADDS TO THE APPEAL OF A CENTRAL LONDON PROPERTY

The UK property market, and London especially, continues to remain attractive to buyers from the MENA region. Investor sentiments have been improving as some lockdown restrictions were initially eased.

Recent initiatives, such as the stamp duty holiday, aim to deflect some of the shocks to the property market due to the pandemic. At the same time, prices for prime locations, including Central London, are expected to stabilise this year, and possibly rise by 2%.

_{Photo credit: www.thenationalnews.com/lifestyle/luxury/owo-residences-by-raffles-historic-london-building-where-royalty-lived-and-james-bond-was-filmed-international-property-of-the-week-1.1241787}

 

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Rooftops have come into the spotlight as a "rediscovered opportunity" according to a recent report by Gensler.

Rooftop spaces are mostly used as storage areas for items such as water tanks and power generators. However, they can provide a spacious alternative for occupiers seeking fresh air, natural light, and a daily change in scenery, the report by Gensler noted.

This is especially relevant in the post-pandemic world, where outdoor space is central to occupier experience and wellness.

HOW ROOFTOPS CAN BE REDESIGNED

The report outlined a number of ways that rooftops can be repurposed to provide more value to occupiers. This would ideally depend on the purpose of the redesign — to provide small recreational spaces, or larger event spaces.

Basic requirements for the redesign would include slab reinforcement for paving and planting, and elevator and staircase (a minimum of two stairways) access. Putting vestibules in place can further help to control stack effect, allowing air to move more freely.

Rooftops can also help improve the energy efficiency of buildings. Owners can make room for green roofs and rooftop gardens for thermal benefits, replace old materials with newer, more energy efficient ones, and also put solar panels in place to create a source of renewable energy.  

Further, rooftops can be weather-proofed as well, and made available for use across seasons, by putting glass wind screens and pergola structures in place.

PUTTING ROOFTOPS TO USE IN THE MENA REGION

While buildings in Masdar City in the emirate of Abu Dhabi are designed to consume 40% lesser energy, rooftops are also fitted with a one megawatt solar rooftop system. In Saudi Arabia, APICORP got Yellow Door Energy onboard to undertake rooftop solar panel implementation, and retrofitting programs, at APICORP’s headquarters in Dammam.

Elsewhere in the UAE, Farnek is working on a 240 square metre rooftop vertical garden project with Denmark-based Urban Ponics. The vertical garden is located at Farnek’s staff accommodation centre in Farnek Village.

The garden will feature a 200 square metre shade house to provide shade for certain plants. Along with shade netting, the site will include grow pods, lava buckets, misters, pumps, water tanks, irrigation and drainage pipes. 

In Egypt, green design studio Shagara has built Green Roof Classrooms co-designed with Ikea. These pergola-like structures, made from reclaimed wood and built on rooftops, are fitted with solar panels, and include biophilic elements as well. 

_{Photo credit: www.farnek.com/farnek-to-create-extensive-rooftop-vertical-garden-at-the-new-dubai-staff-accommodation-centre/,} 

 

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