By Ghulam Haider
It is high time to embrace greater transparency in UAE’s real estate sector for a more sustainable future in line with In line with its commitment to rapidly decarbonize cities and ensure that real estate evolves and adapts in a sustainable way
According to JLL’s latest Global Real Estate Transparency Index (GRETI), Dubai and Abu Dhabi were the world’s strongest improvers, and Dubai joined the ‘Transparent’ tier for the first time this year.
A JLL briefing provided an opportunity for industry experts and thought leaders to discuss Dubai’s position; what it might take to leap into the ‘Highly Transparent’ GRETI tier, and how sustainability is key to achieving high transparency.
Delivering the opening remarks, Thierry Delvaux, CEO, Middle East, Africa and Turkey at JLL said: “Higher real estate market transparency encourages higher investment levels. Therefore, inevitably, some of the highly transparent cities are considered to be preferred destinations for real estate investors — Dubai being an ideal example of this phenomenon. With the Dubai Land Department continually striving to enhance transparency within the sector coupled with the country’s strong economic growth, and initiatives such as visa reforms, we see a buoyant, vibrant market in Dubai and the UAE.
“It has become acutely apparent that if cities and nations are going to progress up the scale of transparency in the real estate sector, there needs to be tangible sustainability action,” he added.
According to JLL, governments are recognizing the crucial role that a transparent real estate sector can play in not only attracting investment but in boosting business efficiency, raising employee well-being and productivity, as well as enhancing the quality of life through robust and well-enforced legal and regulatory frameworks that protect citizens and their property rights.
Transparency relating to regulations, standards, and metrics to deliver sustainable, low-carbon, and resilient buildings will be essential, as pressures grow on the real estate industry to meet the challenge of decarbonization.
While Dubai has made significant progress in gaining a place in the ‘Transparent Tier’ for the first time, the Emirate will need to double down on initiatives and regulations to create low-carbon and resilient buildings, as businesses who are attracted to the market and have ambitious ESG commitments are increasingly seeking rigorous sustainability standards in the buildings they occupy.
Jeremy Kelly, Global Research Director, City Futures at JLL, spoke to Al Arabiya English on the global best practices regarding achieving greater market transparency in the real estate sector; and how it can be applied here in the UAE and Gulf region.
“The best practices are typically found in highly transparent real estate markets such as the UK, US, France, and Australia. In these markets there is good access to quality data at a building and market level along with a high level of corporate disclosure; the legal and regulatory frameworks are robust, enforced, and predictable; stakeholders can be sure that they are treated fairly when transactions are taking place; and crucially, regulations, standards, and metrics are being put in place to deliver sustainable, low carbon and resilient buildings,” said Kelly.
“As sustainability is becoming the new marker of real estate transparency, the UAE can progress up the transparency ranking by doubling down on initiatives to create low-carbon and resilient real estate. The country has already made good progress on its sustainability agenda, but it now needs to push further and harder on its buildings’ energy and emissions standards, extend initiatives to cover existing buildings, not just new builds, and transition from voluntary to mandatory regulatory frameworks.”
Speaking on the main factors that have led to the UAE boosting its ranking in the Transparency Index 2022 and the next steps that he foresees happening on this front in the region, he said: “Dubai has shown the world’s strongest progress in real estate transparency over the past two years due to the concerted effort by the government. We call out its REST platform, with its enhanced digital services and data provision such as service charge management, automated valuations, and transactions databases. There have also been new regulations around market lending practices and tightening up beneficial ownership tracking.”
“To leap-frog to the Highly Transparent category, Dubai should focus on sustainability initiatives that help deliver its Net Zero by 2050 commitment. As the emirate looks forward to hosting COP28, it has a huge opportunity to showcase its sustainability credentials,” said Kelly.
“With the UAE hosting next year’s COP28 climate talks, it is the perfect time for the local real estate sector to bootstrap itself into greater sustainable activity,” underlined Kelly.
Louise Collins, JLL Head of Project & Development Services UAE and Head of Engineering & Energy MEA, shared interesting insights on decarbonizing the real estate sector.
He said that existing building stock will play a crucial part in global decarbonization. Accounting for almost 40 percent of global carbon emissions, the real estate industry will play a crucial role in the fight against climate change. If 80 percent of building stock will continue to exist in 2050, there is a clear need to retrofit buildings to decarbonize assets and align with global commitments.”
COP 27: Encouraging collective action
JLL also hosted an informative discussion titled “Cities, Real Estate, and Decarbonization” at COP 27 in Egypt with the goal of encouraging collective action towards decarbonization of real estate as a key tenet of climate reform.
This event signified yet another step forward in JLL’s ongoing efforts to drive climate action for sustainable real estate, healthy spaces for all people, and inclusive places for thriving communities by collaborating with reputable global organizations such as the World Green Building Council (WGBC).
The symposium brought together industry experts on a common platform to deliberate on how city governments and the real estate industry could work together to ensure the realization of vital climate goals and Net Zero targets.
Reflecting on the strategies that can enable cities to achieve a net zero economy, Victoria Burrows Director, Advancing Net Zero at World Green Building Council, elaborated on how decarbonizing and electrifying the built environment will be critical to delivering a net zero global economy, emphasizing imperatives such as the greening of energy grids and concerted private and public partnerships.
“Real estate investors and occupiers can and must think beyond carbon. Creating green, healthy, regenerative, and resilient spaces and places is a tall but achievable order, one that simply must be met. As we tackle the decarbonization challenge, there needs to be a greater alliance to tighten the ambition loop between property owners, investors, and corporate occupiers, as well as national and city governments, and other key enablers. We must work together towards common targets and taking a whole life-cycle approach to development as a critical part of the solution, taking inspiration from those working towards this reality,” underlined Burrows.
Citing initiatives such as Egypt’s National Social Housing Program and challenges like the requirement for additional financing Ayman Sami, Head of Egypt, JLL underscores the country’s progress towards building green.
Sami said: “I think we are all in agreement that achieving Net Zero emissions in the real estate sector is not possible without greening the energy grid. In Egypt, it’s interesting to note that in the 2021/22 financial year, foreign direct investment in renewable energy projects grew to $3.5 billion. Therefore, we are certainly heading in the right direction, and the government is aware that more efforts need to be exerted jointly between the private and public sectors to achieve the desired targets.”
Louise Collins, Head of Project & Development Services UAE, and Head of Engineering & Energy MEA, said in her closing remarks: “We believe this event marked a rare chance for stakeholders from the Global North and South to come together and develop a deeper understanding of the lessons learned and issues we all face within the sector – from funding to regulation. We hope that together, we can help drive the necessary changes to ensure buildings, cities, and our sector continues to thrive while responding to the need for radical climate reform through decarbonization.”