Abu Dhabi real estate pivots to green
29 November 2022
This article is the second in a series that captures key highlights from the Abu Dhabi Real Estate Roundtable jointly held by MEED and Mashreq on 28 September, discussing the trends shaping the way forward for the emirate’s real estate sector. Participants at the closed-door event included government, business and financial stakeholders. |
Tapping into investor demand for sustainable property development could help Abu Dhabi propel its real estate sector to new heights, according to leading industry experts gathered at the Abu Dhabi Real Estate Roundtable.
“Globally, there is a growing call for ESG adoption and sustainable development,” said Anthony Taylor, senior executive officer at Masdar Green REIT, speaking during the high-level discussion organised by MEED and Mashreq on 28 September.
“Investors are increasingly looking for ‘responsible’ investment opportunities and evaluate companies based on specific ESG practices criteria. This highlights the rise in recognition of the climate crisis and how it must be addressed in the real estate industry.
“Now that there is the necessary awareness of the need for climate action, we must continue to take small steps that will have a big impact in the future,” said Taylor.
Growing demand
Stakeholders are already witnessing demand for properties that meet high environmental standards in the emirate.
“To give you an example, Siemens has a global mandate for their office buildings to meet a minimum LEED Gold certification and they chose to base their regional HQ in Masdar City, which is already home to one of the largest clusters of low-carbon buildings in the world,” said Francisco Galan, director at Masdar Green REIT and head of development and portfolio management at Masdar City.
The German multinational’s regional headquarters in Masdar City is the first LEED Platinum-certified office building in Abu Dhabi and one of the first assets acquired by Masdar Green REIT in 2020.
Major decisions, such as headquarter location, highlight again the investor and tenant appetite for sustainable real estate options. The Masdar Green REIT gives investors that option by investing in sustainable income-generating real estate assets, with a primary focus in Masdar City. This REIT also provides a vehicle through which third-party, sustainable developers can monetise their assets, attracting both real estate developers to Masdar City, and aspiring local and international sustainable investors
Francisco Galan, Masdar Green REIT
The demand and supply for sustainable products are interlinked. Demand will drive the creation of the product and vice versa.
“Unless there is change demanded for your product, you will continue to build things the same old way,” said a senior representative from a real estate development company. “It is indicative that people want a certain kind of lifestyle and will commit to projects that support this.”
In January 2022, Abu Dhabi developer Aldar announced The Sustainable City project, to be jointly developed with Diamond Developers at a value of AED1.8bn ($490m).
The community will comprise townhouses, apartments and retail spaces, spanning an area of 397,000 square metres on Yas Island. A core part of the development is its sustainability factor. It will be powered by renewable energy and incorporate practices around energy efficiency, recycling and indoor vertical farming.
Aldar is also the first real estate company in the Middle East and North Africa (Mena) to secure a sustainability-linked loan. In 2021, it signed a five-year AED300m facility with HSBC that connects interest rates payable to achieving sustainability targets.
READ: Key highlights from the first Abu Dhabi Real Estate Roundtable
Positive change
According to stakeholders at the roundtable, the relatively young responsible investing landscape is evolving rapidly. However, there are numerous challenges around the harmonisation and consistency of data, measurement and maintaining high standards in the real estate industry.
Organisations need to start somewhere, and the considerations made today by backing and introducing these priorities in key projects and developments can help create incremental positive change for the future.
Even as demand for sustainable products rises, issues such as upgrading existing properties and a hesitancy to embrace the shift still linger.
“One of the initiatives we have recently introduced in another Dubai property portfolio has been ARC reporting on all assets to highlight, to both tenants and shareholders, some of the lower levels of sustainability these assets are currently achieving,” said Masdar REIT’s Taylor.
He explained that the motivation behind this initiative is to emphasise the need for improvement at both the asset level and, in some cases, tenant behaviour as well.
Retrofitting is another tactic that the government and developers are turning towards as they seek to upgrade existing assets to higher standards.
In a recent announcement, Aldar said it would invest AED25m ($6.8m) to energy retrofit 13 of its residential communities. The investment will offset 19,000 tonnes of carbon dioxide emissions annually and reduce utility consumption by AED12m across the communities.
READ: Retrofit can be a realistic route to net zero
Abu Dhabi’s Mubadala Investment Company has placed responsible investing at the core of its business. Against the backdrop of climate action, the energy transition and the role of business in society, it is continuing to integrate principles of investing responsibly into its decision-making and asset management processes.
To help build fluency and institutionalise ESG, Mubadala has established a dedicated, responsible investing unit to support its business along this journey.
Implementing change is not easy, and getting people on board with green investment strategies can be challenging, given this is a relatively new investment landscape.
Yet industry players state that partnerships can help achieve sustainable value creation while delivering tangible change and positive impact. A call to action is needed and banks can be seen supporting such efforts by confirming their position to finance projects that meet responsible investing criteria.
At a glance: Sustainable development in Abu Dhabi National targets For example, the Estidama building design certification system is geared at measuring the environmental performance of built structures from planning all the way through to the decommissioning stage. Within Estidama, the Pearl green building rating system provides minimum criteria that buildings and villas in the emirate must meet from a sustainability aspect. A dedicated Environment Vision 2030 defines five priority areas (climate change; clean air and noise pollution; water resources; biodiversity, habitats and cultural heritage; and waste management) to ensure integration among three key pillars: environmental, economic and social. Abu Dhabi Global Market Keeping in line with national and international demand for sustainability, ADGM has increasingly turned its focus towards green finance practices and supporting ESG-led investments. 2019 saw the launch of the Abu Dhabi Sustainable Finance Declaration by the ADGM. The declaration, supported by over 46 public and private sector entities, aims to increase the quality and depth of green financial products in the emirate, and to create a thriving, sustainable finance industry. In June 2021, Abu Dhabi was ranked fourth-highest in the Mena region and 50th globally on the Global Green Finance Index. Masdar City Masdar City is also home to the International Renewable Energy Agency (Irena) headquarters, a global intergovernmental organisation providing insights and consultancy support regarding energy transition. Stemming from efforts in Masdar City is a green real estate investment trust (REIT), the first of its kind in the region, which directs funds towards sustainable properties within the city. Launched in 2020, the Masdar Green REIT provides investors with responsible investment options. Earlier this year, the REIT signed a financing commitment of a $200m green loan with First Abu Dhabi Bank (FAB) to facilitate portfolio growth. As of December 2021, the REIT’s portfolio was valued at AED980m ($267m), marking a valuation gain of AED32m ($8.7m) over the year. |
Exclusive from Meed
-
-
Egypt makes steady progress on Assiut refinery
2 June 2023
-
Mawani implements $950m of Saudi port projects
2 June 2023
-
Dubai unveils new masterplan for Palm Jebel Ali
1 June 2023
-
Swedish firm to deliver apartments for Neom
1 June 2023
All of this is only 1% of what MEED.com has to offer
Subscribe now and unlock all the 153,671 articles on MEED.com
- All the latest news, data, and market intelligence across MENA at your fingerprints
- First-hand updates and inside information on projects, clients and competitors that matter to you
- 20 years' archive of information, data, and news for you to access at your convenience
- Strategize to succeed and minimise risks with timely analysis of current and future market trends

Related Articles
-
Contractors submit bids for next phase of Duba port
2 June 2023
Contractors have submitted bids for the next phase of the Duba port expansion at Oxagon industrial city.
The bidders are Belgium’s Deme with Greece’s Archirodon; Van Oord of the Netherlands with South Korea’s Hyundai Engineering & Construction; a Belgian joint venture of Jan de Nul and Besix; Netherlands-based Boskalis with France’s Soletanche Bachy; South Korea’s Daewoo; and China Harbour Engineering Company.
The tender for the project’s second phase follows the award of a contract to deliver the first phase of the port expansion. A team of Boskalis, Besix and the local Modern Building Leaders (MBL) was awarded that estimated SR3bn ($800m) contract in mid-January.
The scope of the Duba port expansion package includes excavation and dredging, revetments for channel widening, demolition, container terminal quay expansion and earthworks, in addition to the development of a flexible quay, a roll-on/roll-off (RoRo) berth and quay walls to a marine services berth and a coast guard facility.
Jacobs is the main design consultant, with Moffatt & Nichol, IGO and Trent as the main sub-consultants.
Contractors are preparing to submit bids in June for a contract to build tunnels connecting the offshore elements of the Oxagon industrial city at Neom to the mainland.
The design-and-build contract involves digging a 6.5-metre-diameter tunnel using a tunnel boring machine (TBM) under the sea that will link the Neom Connector with the offshore elements of Oxagon port. It will house utilities including water pipelines, fibre optic cables and electricity cables.
Crown Prince Mohammed bin Salman launched Oxagon in late 2021. It will include onshore elements as well as floating structures offshore. Construction works on the 48 square-kilometre, eight-sided industrial city have already started.
An expanded Duba port is a critical component of Oxagon and the broader Neom development, as it will allow greater volumes of materials to be imported for the project. With an expected investment value of $500bn, Neom is the largest programme of construction work in the world.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10909320/main.jpeg -
Egypt makes steady progress on Assiut refinery
2 June 2023
Egypt is making steady progress on the $2bn hydrocracking complex package that forms part of the wider Assuit oil refinery upgrade project, according to industry sources.
Assiut Oil Refining Company (ASORC), a subsidiary of state-owned Egyptian General Petroleum Corporation (EGPC), is the project operator.
“Work on the main units is continuing with no significant issues,” said one source.
During 2021, the project faced disruption due to issues related to the Covid-19 pandemic.
In 2023, many projects in Egypt’s oil and gas sector have been disrupted by currency issues due to the declining value of the Egyptian pound.
Most of the projects that the currency issues have significantly impacted have been in their early stages, with the problems related to the procurement of materials and equipment.
France’s Technip Energies is the main contractor performing engineering, procurement and construction (EPC) works on the Assiut hydrocracking complex, as part of a $2bn contract it was awarded by ASORC in February 2020.
In April 2021, Switzerland-based Burckhardt Compression announced being selected by Technip Energies as the gas compressor supplier for the hydrocracker package.
ASORC held a kick-off meeting for the project in September 2020.
Egyptian contractors Enppi and Petrojet are supporting Technip Energies on the project. Enppi has undertaken the engineering work, while Petrojet is carrying out construction work.
In 2021, contractors completed the construction of a $450m high-octane gasoline complex in the Assiut governorate as part of the broader $3.8bn Assuit oil refinery upgrade project.
Assiut refinery
The Assiut hydrocracking complex will be one of Egypt’s major strategic refineries, and will help meet growing local demand for cleaner products.
The project will also become the largest oil refining facility to be implemented in Upper Egypt so far.
Once completed, the project will transform lower-value petroleum by-products, such as mazut, into cleaner, higher-value products.
It is expected to have an output of about 2.8 million tonnes a year of Euro-5 diesel, in addition to other petroleum products.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10908534/main3340.jpg -
Mawani implements $950m of Saudi port projects
2 June 2023
Saudi Ports Authority (Mawani) is implementing a series of projects over the coming 18 months as part of its efforts to improve and expand infrastructure at ports and increase their utilisation rates.
The programme, worth about SR3.5bn ($950m), comprises just over 150 projects, of which 48 are strategic in nature, 90 infrastructure-focused and 14 targeting security enhancements.
The most significant projects are:
At Jeddah Islamic Port
- A four-year contract to build a new road, interchanges and flyovers to link Gate 9 with the Al-Khumrah integrated logistics park.
- Deepening over three years of the north basin approach channel to 14 metres and the construction of a bull nose dike
At Ras al-Khair Port
- Increasing the draft depth of berths 11 and 12 to 16 metres
- A three-year job to widen and dredge the approach channel from 300 metres to 500 metres and deepen it by 3 metres to 19 metres
Other key investments include installing integrated security systems at Jeddah Islamic Port and King Abdulaziz Port in Dammam and constructing a new 40MVA substation at King Fahd Port in Yanbu.
The contracts are expected to be tendered and awarded by the end of 2024.
Mawani’s planned investment comes on the back of several major contracts awarded over the past 12 months, including an agreement with DP World to set up the Al-Khumrah logistics park, the reconstruction and expansion of the first and second container terminals at King Abdulaziz Port, and the upgrade of berth infrastructure and draft depths at Jeddah Islamic Port and King Fahd Port.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10909176/main.jpg -
Dubai unveils new masterplan for Palm Jebel Ali
1 June 2023
Dubai has released details of the new masterplan for Palm Jebel Ali, an artificial island located south of Jebel Ali Freezone.
Double the size of Palm Jumeirah, Palm Jebel Ali will have 110 kilometres of shoreline and extensive green spaces. The development will feature over 80 hotels and resorts, along with a diverse range of entertainment and leisure facilities.
Strategic masterplan
The unveiling of the masterplan aligns with Dubai's commitment to doubling the size of its economy by 2033, as outlined in the Dubai Economic Agenda.
The project, approved by Sheikh Mohammed bin Rashid al-Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai, includes seven connected islands, catering to approximately 35,000 families. The development also emphasises sustainability, with 30 per cent of public facilities powered by renewable energy.
MEED reported in January that local developer Nakheel had approached contractors to complete the reclamation works for Palm Jebel Ali.
As with Palm Jumeirah, it is estimated that it could take around 20 years for Palm Jebel Ali to reach its full development potential. Nakheel has previously secured AED17bn ($4.6bn) in funding to expedite the development of various projects, including the Dubai Islands and other waterfront schemes.
The upcoming dredging contract for Palm Jebel Ali is anticipated to involve 5-6 million cubic metres of material, contributing to the completion of the man-made offshore island.
While reclamation work for Palm Jebel Ali is mostly finished, the project was put on hold in 2009. Nakheel had made some progress with infrastructure development, including the construction of bridges on the island by Samsung C+T.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10906519/main.jpg -
Swedish firm to deliver apartments for Neom
1 June 2023
Swedish modular home manufacturer SIBS has been awarded a contract to deliver 2,174 apartments for Neom.
The engineered equipment supply contract involves SIBS constructing 35 buildings within Neom’s primary staff accommodation and office cluster.
The apartments will cater to professionals involved in the planning, engineering and construction of Neom. The entire project is expected to be delivered and commissioned by the third quarter of 2024.
The $500bn Neom development in northwestern Saudi Arabia is the region’s largest construction project and employs thousands of staff.
Elements of the project that have been officially launched so far are The Line, Oxagon, Trojena and Sindalah. There are also plans for an international airport and a coastal strip of hotels known as the Gulf of Aqaba.
https://image.digitalinsightresearch.in/uploads/NewsArticle/10905700/main.gif