How the private sector can lead on sustainable development in the Middle East and North Africa

Date & time : Tuesday, 19 March 2024

Hawazen Esber

With urban development and buildings accounting for 37% of energy-related emissions in the Middle East and North Africa (MENA), many governments in the region have established solid, long-term strategies for the built environment.

Indeed, PwC estimates there’s a $2 trillion opportunity for MENA to become a global leader in the built environment space.

In the past 24 months, MENA governments have pledged to cut 60% of emissions across the region, putting the focus on real estate developers to convert these pledges into real-world solutions.

But just 12% of MENA’s top 200 companies have committed to net-zero targets, and only 6%, including Majid Al Futtaim, have outlined a clear roadmap to meet those targets.

It is now in our hands to transform these strategies and implement them into our projects, collaborate across the private sector, and lead the way on sustainable urban development – together.

Strategies for sustainable urban development

Here are five ways that developers, designers, contractors, owners, occupants and regulators can work collaboratively to incorporate sustainability across our projects.

1. Put collaboration at the heart

By cooperating inclusively from the start, we can strengthen communities and embed sustainability from the ground up. At Majid Al Futtaim, we seek to incorporate different stakeholder views into our destinations and developments. One approach is through partnerships with local universities that capture students’ insights, creativity and passion.

Many existing buildings also require redevelopment and regeneration, giving rise to an opportunity to make them more sustainable and revive their appeal.

2. Prioritize sustainable and connected living

MENA’s fast-expanding cities can and must prioritize sustainable and connected living, weaving green spaces, walkways and cycle routes into designs for more climate-resilient communities.

Tilal Al Ghaf, Majid Al Futtaim’s flagship community in Dubai, is a prime example – as restaurants, retailers and a world-renowned school are all within a short distance. This aligns with the UAE’s 2040 Vision for interconnected “five-minute cities” that reduce car dependency.

Our strategy is centred on the concept of ‘net positive’ buildings, where the annualized balance between energy load and generation goes beyond achieving a ‘zero’ balance. The emphasis is on over-delivering; buildings not only meet energy needs but contribute excess energy back to the grid.

These buildings act as a hedge against future energy price fluctuations and regulatory changes – ultimately reducing risks for developers and building operators. Our current design stage projects are 35% more efficient than our best-performing assets, which is particularly notable given most of our portfolio is BREEAM Excellent or LEED Platinum or Gold certified.

3. Apply a systems approach

While the need for more sustainable environments is clear, the challenge is bringing them to fruition for as many people as possible. Integrating complex and interdependent projects into planning with a systems approach may be part of the solution. Treating sectors as parts of a whole system leads to better outcomes.

This puts the emphasis clearly on developers to collaborate across sectorsand plan thoughtfully for sustainable and inclusive growth. The most productive outcomes occur when this starts at the design stage, with developers working to ensure interconnectivity between their sites.

When designing Serenity Mansions, our latest launch at Tilal Al Ghaf, we worked closely with our architects who were just as committed to promoting sustainable living, reducing our impact on the natural environment, and connecting the design to its natural environment.

4. Share common platforms

As shared platforms pool resources, they’re more likely to be efficient and sustainable. For example, centralizing solar power production across plots allows communities to share excess renewable energy via connected grids.

Global examples of this can be found in Singapore, where solar panels are seen on the sides of buildings across the city, and in Smart Seoul – a project that embeds ICT infrastructure across the city.

Other cities showcase sustainable infrastructure sharing – like Fukuoka in Japan, where sewage is used for hydrogen production, and Dubai, where a green corridor cycling track, the Loop aims to make the city the most connected on earth by foot or bike.

5. Win over investors

Promoting sustainability and responsible investing has become a priority in MENA. Initiatives include green bonds, environmental, social and governance funds, and sustainability frameworks.

Majid Al Futtaim demonstrated its green financing commitment with its debut green sukuk – Shariah-compliant investments in renewable energy and other environmental assets – in 2019, followed by sustainability-linked loans.

Sovereign wealth funds and central banks are also leading green investments, leveraging their capital, for example, by backing Shanghai’s One Museum Place sustainable office.

The market for net positive developments is not only viable but thriving due to a combination of environmental awareness, government support (in the UAE, initiatives like the Green Building Regulations and Specifications by Dubai Municipality set guidelines for sustainable construction) and economic incentives. Some 80% of UAE real estate investors prioritize sustainability and 70% globally will pay a premium.

Customers today understand the long-term benefits and are eager to embrace and invest in homes that contribute positively to the environment and their quality of life.

While MENA is making strides, as developers we need to focus on integrated projects that are sustainable in both construction and operation. Most importantly, they need to bring residents and local stakeholders into the process, gaining buy-in to foster communities that are environmentally and socially sustainable.

Source: World Economic Forum