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Integration of environmental, social benefits and aesthetic values into real estate projects is driving demand and supports stable pricing structures

With trends in the GCC region’s population set to continue upwards in the foreseeable future, demand for the construction of new housing and new cities remains strong, in the short to medium-term. As a result, supporting services relating to infrastructure, commercial and industrial projects continue to offer positive indicators for growth. Despite an overall economic recession being felt in most of the region’s markets, GCC countries have maintained an ability to promote and attract foreign investment, based on these demand factors.

The rapid pace of construction and the building of new cities, in the region, do raise questions about the level of impact this will have on the environment. Of course, a balance has to be struck between sustainable environmental requirements, and providing adequate housing to compensate for population growth.

In this respect, Al Mazaya Holding’s Weekly Real Estate Report points out that maintaining natural habitats, in the face of urban growth to match population trends, is a major challenge. This is also a problem for countries that have an abundance of natural greenery and rainfall; however, these challenges are doubled when we talk about cities constructed in arid, desert climates.

While the GCC region remains a popular destination for high volumes of real estate investment, conforming to global standards on the environmentally sustainable construction of new urban developments continues to present challenges.

Al Mazaya’s Report can reveal that urban design and planning are among the key factors that attract investors to a real estate market and its domestic infrastructural developments. Planning, research and study are the fundamental building blocks for any large-scale development; however, governments, end-users and investors are increasingly demanding that projects offer long-term sustainability solutions, energy efficiency, and environmentally friendly architecture and landscaping.

Such demands have, historically, meant higher costs to the developer; however, increasingly, it has become possible to capitalise on the advances in the development of both sustainable and recyclable substances used for construction. Materials and designs more suited to hot weather, energy efficiency, and offer reduced impact on the immediate environment are now just as important to homeowners as aesthetically attractive living spaces.

Al Mazaya’s Report further points out that while urban areas are expected to grow in number – worldwide – over the next twenty years, the drive to construct “green cities” is now very much on the agenda of many governments. Allocating areas for gardens and urban landscaping can make cities less contaminated by pollution and help protect local habitats and wildlife. Such measures are of significant importance in the likes of China and India, where cities are expected to grow at a rapid rate throughout the 21^st century.

The report also indicated that pressures and challenges facing environmentally sustainable developments are set against the forecast that 4.9 billion people will be living in cities and urban areas, by 2030. This means that urban areas will expand by no less than 150 per cent, over the same period. This presents a major challenge to maintaining the natural environment, particularly in the extremely large cities, which continue to attract migrating populations. Moderately sized, smaller cities do have better opportunities to manage this trend.

To this end, Al Mazaya’s Report states that while problems exist in certain large cities, developing new and sustainable cities of the future is a concept that is being embraced by GCC countries. This can be seen and recognised in a variety of new projects and cities being developed in the region.

 

Health & Wealth benefits

In addition to preserving the natural habitat, “green spacing” within and outside cities helps to prevent dust, reduce contamination from pollution and absorb CO2 emissions – all of which offer positive contributions to residents as well as the planet’s health. Of course, green spaces naturally give a city a more aesthetic value, but sustainable and smart cities are not just “nice ideas to have”. By offering significant environmental, energy, social and health benefits, it will make them some of the most sought after places to live.

According to Al Mazaya’s Report, green spaces have a direct relationship on the attractiveness of real estate projects. Health and environmental considerations have become key features and priorities for consumers of many types of housing units. Expanding the green space around buildings has become an environmental and social requirement that helps reduce water and air contamination as well as having some cooling effects on high temperatures.

Real estate market indicators, around the world, point out that pricing is directly related to green spaces; real estate prices go up whenever nearby landscaping and parks undergo expansion and development. It is worth mentioning that studies show that residents of cities with a higher ratio of green spaces enjoy a better quality of life.

Today, over 50 per cent of the world’s population lives in urban areas, a matter which reflects positively on efforts to augment the use of landscaping in the planning and execution of cities. It has also been noted that end users increasingly realise the long-term importance of sustainable real estate and environmentally friendly construction practices. This, in turn, is affecting purchasing and re-sale priorities.

 

UAE

Al Mazaya’s Report has also identified that considerable development on the concept and content of the expansion of green spaces, in the UAE, has coincided with the rapid urban expansion witnessed across the country, since the turn of the century.

Recent data shows that green spaces, in the Emirate of Dubai, expanded by more than 35 per cent, in 2015. While aesthetic factors are a consideration, expanding the green areas are part of the city’s strategic concept and series of objectives, in respect to environmental considerations. These recent additions have increased the share of green spaces to over 13 square metres, per capita.

In the emirate of Abu Dhabi, around 6,600 hectares of greenery was added over the last 12 months. Official bodies are now adhering to global standards and practices, with modern technologies also being deployed to assist in areas such as climate conditioning and the rationing of water. Around 64 future projects, including entertainment parks and gardens, will be developed over the next few years.

 

Qatar

Al Mazaya’s Report also points to the efforts in Qatar, where integration of green spaces within its urban development is currently being implemented. These efforts are supported by a planned agricultural strategy being rolled out across the country. One of the key stated aims is to combat the high summer temperatures experienced in Qatar, in addition to providing more attractive real estate projects, offering adjoining public parks and gardens, which can add tangible value to property prices, compared to other locations.

 

Conclusion

In spite of the current challenges facing regional economies, the provision, allocation and recycling of water is considered to be the backbone for the success of green space expansion strategies – both within and outside the cities.

In addition to capitalising on foreign expertise and technologies, GCC countries are in need of more forestation. While the environmental advantages are clear, these types of initiatives will also help enhance the psychological and physical health of society. In relation to climate conditioning and moderating the effects of the weather – especially in summer – forestation will contribute to lowering the region’s extremely high temperatures.