ESG Imperative
The “ESG Imperative”: The View from the Middle East, delves into the growing significance of Environmental, Social, and Governance (ESG) considerations on a global scale. This report provides valuable insights from 2022, into the impact of ESG in today's real estate landscape, shedding light in shaping the future of commercial assets, occupier preferences, and investor decisions. with 40% of global greenhouse gas emissions originating from buildings. ESG-rated assets are in high demand, with clear evidence of rental premiums, particularly among international blue-chip businesses.
Dubai's Green Transition
Dubai is at the forefront of the global green awakening, experiencing a significant rise in office rents. Demand for top-quality office spaces is surging, with rental growth particularly pronounced in areas with modern stock. In Dubai, average renovation/refurbishment costs for office buildings range from approximately AED 280 per square foot (psf) and can be as high as AED 580 psf. The transition reflects the growing importance of Environmental, Social, and Governance (ESG) principles. Businesses are actively seeking prime Grade A office spaces with a strong preference for green-rated buildings.
Green Building Certifications
Internationally recognized green rating systems such as LEED and BREEAM are shaping modern building standards. Globally, there are 80,000 LEED-certified buildings and 2 million buildings covered by BREEAM in 50 countries. WiredScore sets the global standard for technology in the built world, impacting over 800 million square feet across 36 countries.
Global Demand for Prime and Green Spaces
International businesses are actively pursuing prime Grade A office spaces, placing a strong emphasis on green-rated buildings. Rental premiums for ESG-rated assets range from 3.7% to 12.3% for prime Central London offices. The market is witnessing a surge in rental growth in locations with modern stock, while older buildings may need to adapt to remain competitive in a rapidly changing landscape.