x Abu Dhabi, UAEThursday 27 July 2017

Going green has not profited Dubai's landlords

It may now be home to the most sustainable commercial building in the world but the greenest buildings in Dubai are failing to fetch any more rent than their non-green counterparts.

It may now be home to the most sustainable commercial building in the world but the greenest buildings in Dubai are failing to fetch any more rent than their non-green counterparts.

According to new research from Jones Lang LaSalle, unlike most other parts of the world where they attract a premium, Dubai's highest environmentally accredited office tower, Standard Chartered Tower, is currently leasing space at the same rates as less sustainable buildings in the same area.

Similarly Mirdif Mall, the only shopping centre in Dubai to have achieved a top ranking under the Leed system of measuring environmental sustainability in buildings, attracts no higher rents or more tenants than its competitors.

The findings come in stark contrast to other world cities. In France Jones Lang found that tenants are prepared to pay 23 per cent more in rent to locate to more environmentally friendly office blocks. In Britain environmentally friendly blocks attract a premium of about 18 per cent. And in the US tenants pay between 2.5 per cent and 17 per cent more to rent space in a green building.

The news comes as a blow to developers in the UAE who have been heavily marketing new green schemes. The country is home to 65 per cent of all of the Leed certified property projects in the Middle East and North Africa Region.

This week the environmental store The Change Initiative on Sheikh Zayed Road announced it had achieved a Leed platinum rating from the US-based Green Building Council, scoring 107 out of 110 points, overtaking Australia's Pixel Building to become the world's most sustainable commercial building.

Despite a few headline-grabbing buildings, the report pointed out that the UAE remains one of the worst polluting countries in the world, producing nearly five times as many tons of carbon dioxide per person per year than the global average of five.

Qatar, which is home to 173 of the Middle East and North Africa's 1,250 Leed accredited building projects, came out as the most polluting country in the region per capita, producing a massive 44 tons of carbon dioxide per person per year.

The report added that a lack of legislation forcing developers to adopt more environmentally, subsidised energy, water and waste disposal costs, and a limited awareness of environmental issues were also to blame for the Middle East's poor overall performance.

Craig Plumb, the head of research for Jones Lang Lasalle's Dubai office, predicted that over the coming decade sustainable buildings in the UAE and across the Middle East as a whole would start to attract a premium as the industry matured.

"Sustainability has been more widely adopted in the real-estate sector of more mature western countries," he said. "The combination of stricter environmental legislation and greater awareness of a sustainable premium will drive increased attention on more sustainable building practices in the Middle East over the next 10 years."

 

lbarnard@thenational.ae