July 2020

Savills: Climate change and food security set to dominate Middle East real estate strategies long-term

Savills: Climate change and food security
  • Over USD 70 billion invested globally in agritech since 2012 with food security expected to drive future real estate activities
  • 2020s is the decade when ‘agritecture’ will become mainstream
  • Global construction and real estate activity contribute to almost 40% of energy and process-related emissions
  • Close to USD 2 trillion worth of projects planned across the ME

Savills, the leading global real estate advisor, concluded its Middle East IMPACTS webinar series with a last session dedicated to the climate change issue. The Savills IMPACTs research programme studied the various social, environmental, demographic and technological tipping points immediately facing global real estate. Paul Tostevin, Director of World Research at Savills, moderated the webinar and was joined by Mohamed Al Banna CEO & Managing Director of LEAD, Qais Bader Alsuwaydi, Expert at the UAE Ministry of Climate Change & Environment, Michiel Raaphorst , Architect-Director and Co-founder of V8 Architects, and Hemant Julka, a social entrepreneur and Co-founder and COO of agri-tech start-up VeggiTech. Together the panelists discussed the built environment and latest innovations in food production

Paul Tostevin, Director World Research at Savills said: “The environmental challenges facing us are very real – the fact that real estate accounts for 40% of all carbon emissions shows that this is something that our industry needs to tackle urgently.  But we’re not standing still, the industry is stepping up and new innovations are driving change to address the challenge.

Today 55% of the world’s population lives in cities and this number is set to rise to over 70% by 2050, as the global population swells and urbanizes. With more population projected to live in cities, according to the OECD, global building stock is set to double by 2050. According to Savills, the Middle East too has seen massive levels of construction over the past decade and this number is only set to increase as close to USD 2 trillion worth of projects are planned across the region. As construction and real estate activity contributes to almost 40% of energy and process-related emissions, the rising construction pipeline may continue to contribute to the changing climate.

Estimates suggest that by 2050, temperatures in the MENA region may increase to 4°C higher on average. Temperature records have been repeatedly broken in the region in recent years with the highest recorded temperature of 54°C being recorded in Kuwait in 2016. Some of the historically driest parts of the world, have also suffered flooding. Jeddah in Saudi Arabia has suffered almost annual floods since the late 1960s, caused by sudden violent storms. Research by the King Abdel Aziz University found that the city’s rapid expansion in recent years has made the situation worse, as routes through which water used to escape have been built over. In Oman, sixty per cent of urban residents are concentrated along the Muscat and Al-Bathina coastline, which is highly exposed to storm surges and sudden onset of sea level rise. This raises the question whether modern methods of construction and retrofitting existing projects can help reverse some of these negative effects in a more sustainable way.

As the population grows and climate change takes centre stage, governments in the region have been focusing on food and water security. Bahrain for example, imports 94% of its food, as a result agricultural practices such as hydroponic farming is becoming increasingly popular. In the UAE, the Ministry of Energy & Industry unveiled the UAE Water Security Strategy 2036, which aims to ensure sustainable access to water during both normal and emergency conditions.

More than USD 70 billion has been invested globally in agritech since 2012, but Savills is predicting that the 2020s is the decade when ‘agritecture’ will become mainstream. Increasing domestic food production though controlled agriculture systems has the potential to mitigate the food security risk. Controlling ambient conditions can result in yields being optimised and processing costs reduced. This level of control means that risks from climatic variation are minimised or even eliminated. Improving domestic production also reduces the exposure to trading risks. Corporates are increasingly looking to mitigate their exposure to supply chain disruption and by growing more food on a reduced land area through vertical farming, some of this risk can be mitigated. It also has the potential benefit for consumers of avoiding price fluctuations that occur from international events.

Michiel Raaphorst, Architect-Director and Co-founder of V8 Architects said: “Smart buildings open a new field of exciting opportunities for improving building performance and on enhancing customer experience. We can learn a lot from global best practices on how to make our buildings more efficient and sustainable for future generations. Sustainability measures are becoming tangible and a real part of the daily economy. And with the designed environment we are able to adapt to and answer societal challenges. We realize that we are consuming too much of this earth, hence instead of making consuming buildings we should rather make producing buildings. For instance like we show in the design for the Netherlands pavilion; a building could in the future act as an inclusive biotope. Also, the use of wood or bio-based material in construction proved it can improve sustainability within our built environment.”

Qais Bader Alsuwaydi, Expert at the UAE Ministry of Climate Change & Environment said: “The environment has always been at the top of the UAE’s national agenda and we are delighted to see more and more countries across the world prioritizing related issues by adopting innovative initiatives for more green buildings. We are fortunate to have strong institutions and a wide range of policies that help mitigate climate change impact and the transition into a climate resilient green economy such as the National Climate Change Plan 2017-2050. However, governments can’t act alone; we need to continue public awareness’ efforts and require the combined efforts from big developers, investors and banks.We know that construction and real estate activities highly contribute to CO2 emissions and we welcome all the nation-wide efforts to reduce emissions, achieve sustainable development and offer a better quality of life for future generations.”

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