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I’ve been looking forward to Cityscape Abu Dhabi this year — not only to talk about the expansion plans of Masdar City, but to address some of the misperceptions that have attached themselves to the UAE real estate sector. While property experts are trying to predict when the Dubai market will bottom out, others are asking if real estate prices in the UAE capital have peaked.
A recent conversation with a senior executive from a major Chinese construction company looking to strengthen its operations in the region suggests that both may be missing the point. As far as he was concerned, the bigger picture for the UAE shows robust demand for property of all types.
In my view, the reasons are simple: low sovereign risk, a reputable and reliable banking system, sustained but predictable demographic growth, and increasing connectivity with the wider region and international markets due to the strategic expansion of Etihad Airways and Emirates, along with measured investment in infrastructure and logistics.
The far-sighted vision of the UAE leadership to diversify the energy mix of the country, along with investment in clean technologies, has resulted in a rapidly emerging market sector with Masdar in Abu Dhabi leading the way.
These factors make for a promising investment climate offering opportunities for savvy, niche developers who deliver value, even amidst the current global economic uncertainties. When property markets flatten out, or soften, there is a logical focus on both quality and value by developers responding to a more discerning and segmented market.
This is one of the reasons why Masdar City is embarking on an aggressive phase of expansion. Around 35 per cent of the planned built-up area will be completed over the next five years, and 30 per cent has already been committed to. Instead of speculating where demand might lie, we talked to our clients, assessed their requirements and financial appetite, and in some cases ‘reverse-engineered’ projects to fit their business framework.
At Masdar City, we also invest a great deal of thought and effort in fostering an ‘innovation ecosystem’ — a hub connecting education with research, and R&D with business and investment.
Anchored by the region’s first graduate-level university specialising in alternative energy and clean technologies, and hosting the headquarters of the International Renewable Energy Agency, Masdar City is building a powerful tech-based business community. When this is combined with a sophisticated free zone and investment zone that offers 100 per cent foreign ownership, zero tax and zero import tariffs, a unique value proposition is the result. Integrated into this innovation ecosystem is a mixed-use community of residences, schools, hotels, retail and office space under development — all being built to the strictest environmental standards. And we’re five minutes from Abu Dhabi International Airport. The increasing cost competitiveness of renewable energy and clean technology throws an additional spotlight on the City, which in turn leads to new projects and partnerships.
Meanwhile, demand for sustainable urban development solutions is creating opportunities to export knowledge abroad, a fact highlighted during the recent visit of His Highness Shaikh Mohammad Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi, to India, a country straining under the burden of population growth.
Few can argue the relevance of the work we do at Masdar City. The global consensus on tackling climate change reached at last year’s COP21 meeting in Paris highlighted the importance of concerted, collaborative action—for which Masdar has become a symbol. The undeniable shift towards clean energy and renewables in the Middle East and North Africa in recent years has also underlined the size of the potential market—and the strategic necessity of choosing one’s niche.
Model for future cities
Masdar City is on a journey to become the world’s most sustainable urban development, and a model for how cities of the future should be built. Hopefully, our experiences bring a sense of perspective to the conventional approach to real estate development.
The logical evolution of our industry should be to move from trying to predict the return of the market to focusing on what we are bringing to the market. That is our priority at Masdar City reinforced by our ambitious future expansion plans.
A closer look
• Approximately 4,000 people work at Masdar City and it receives 2,300 visitors on average each week.
• Buildings within Masdar City are designed to reduce energy and water consumption by at least 40 per cent in accordance with LEED and Estidama PBRS baselines.
• The Personal Rapid Transit system at Masdar City carried 32,844 passengers per month in 2015, an increase of 14.8 per cent compared with the previous year.
• Buildings use materials such as low-carbon cement produced on-site and 90 per cent recycled aluminium, as well as locally sourced materials.
• Masdar City uses clean energy generated on-site by rooftop solar PV panels, and takes renewable energy from the national grid, supplied by a 10MW solar PV array nearby and the 100MW solar power plant in Western Abu Dhabi.
• The 10MW solar PV array next to Masdar City produces 17,500MWh of clean electricity that diverts 7,200 tonnes of CO2 annually.
• The Masdar City site occupies 160,000 square meters; another 80,000 sqm is under construction.
Source: Anthony Mallows, Special to Property Weekly
Executive Director, Masdar City. Also hosts the headquarters of the International Renewable Energy Agency (IRENA) and the Masdar Institute of Science and Technology, developed in cooperation with the Massachusetts Institute of Technology. Mallows is both an architect and city planner with extensive experience in the feasibility, programming, planning, design and management of large, complex projects worldwide.
Al Nisr Publishing accepts no liability for the views or opinions expressed in this column, or for the consequences of any actions taken on the basis of the information provided.