Dubai's new development game is attention to detail and sustainability
Chief executive officer of UAE-based Aurora Real Estate Development, Cian Farah explains the changing trends in Dubai's property market in 2018
In 2018, we have so far witnessed ready transactions rising by 24%, with off-plan transactions falling by 32%.
Mortgage purchase still account for the majority of transactions and increased by 18.01% when compared to Q1 2017, indicating that end users are more active than investors in the market. With a materialisation rate of c.40% expected, the overall supply in 2018 could reach 40,000 – 45,000 units.
Although supply has outpaced demand and yields have reduced, the current average of 7%-8% is still attractive when compared globally and Dubai continues to be seen as a safe haven in the Middle East for investors as evidenced by the 12,547 secondary market transfers and 24,964 off-plan sales transactions registered in the Dubai Land Department in 2017.
The hospitality landscape is changing, with the growth of short term letting offerings competing with the traditional hotels.
In addition, the supply growth of serviced apartments has outstripped hotels in recent years, with a compound annual growth rate of 14.3% in the past 10 years, versus a 10.1% growth in the number of hotel rooms.
These alternatives are expected to grow as budget-sensitive tourists seek better deals. Aurora has decided to create a building in downtown Jebel Ali that will cater to this segment. It will have 112 studios, one bed, and two beds with similar amenities to a hotel and is expected to open in 2020.
The UAE Energy Plan 2050 aims to cut carbon dioxide emissions by 70%, increase the contribution of clean energy in the total energy mix to 50%, and improve energy efficiency by 40% by 2050, subsequently leading to a targeted saving of approximately $191bn (AED700bn).
According to HE Dr Thani bin Ahmed Al Zeyoudi, Minister of Climate Change and Environment, the UAE has a leading role in adopting and disseminating solutions to help achieve the concept of sustainability across all sectors, in line with the UAE 2021 vision.
Globally, the built environment accounts for 60% of worldwide resource consumption, 35% of greenhouse gas emissions associated with energy, whilst producing about 50% of waste and consuming 12% of water resources.
Given the past four decades of unprecedented urban and cultural development in the UAE as well as exponential population growth, there is an urgent need to follow more sustainable methods in the building and construction sector.
Moving towards “Nearly Zero Energy Buildings” to save energy and cutting consumption is an important step, as up to 80% of UAE’s electricity consumed by buildings is for essentials, such as air conditioning.
LEED (Leadership in Energy and Environmental Design) certification and other sustainability credentials can be costly, but Developers can engage in a number of activities regardless of obtaining the certifications and still benefit from a reduction in cost.
The UAE’s wise leadership have developed long-term national strategies such as the National Plan for Climate Change 2017-2050 and the Green Agenda 2030 to ensure the country is moving towards green growth.
Laws and regulations for green buildings, specific standards for machinery and a tariff system have been established to ensure the effective use of resources. As a result, the UAE now ranks among the top 10 countries other than the USA in terms of numbers of buildings with LEED certifications.
Apart from the standard systems of introducing solar panels, utilising grey water systems for reuse of irrigation/sanitary water and using LED lights, Aurora has also selected sanitary ware items that are ecologically friendly, which can reduce water usage by as much as 30%.
Waste management is an important subject for Aurora. A Construction Management Plan (CWMP) minimizes the quantity of construction waste and debris bound for landfill disposal and incinerators and maximizes what can be used or recycled and ultimately recovered. In one of our projects, Hyati Residence, we successfully managed to divert 75% of all waste generated.
In summary, renewable energy solutions are becoming more economical. In addition, water conservation is vitally important. The construction industry has a huge impact on our environment and we can make a substantial impact through this industry by reducing consumption and implementing sustainable practices.