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According to an analysis by Knight Frank, a growing number of companies in the Middle East are increasing their sustainability expectations, sending a clear signal to their landlords: “Green your property or risk losing a tenant.”

Knight Frank surveyed nearly 400 companies worldwide, including leading companies in the Middle East, to assess sentiment in the real estate scene for sustainability. In line with global developments, there is a broad consensus in the region that climate change is becoming increasingly important and relevant in real estate decisions.

“Three quarters of companies in the Middle East say that their future real estate decisions will be influenced by their net-zero targets,” said Faisal Durrani, Head of Middle East Research at Knight Frank. According to Durrani, the acceleration of the “green agenda” builds on two major developments: the unfolding global climate crisis and behavioral changes triggered by the Covid-19 pandemic.

Globally, 40% of companies surveyed have set themselves a net zero carbon target, and of these, 77% aim to achieve this by 2030. The problem, however, lies in the provision of “green buildings” with nearly nine in ten respondents believing that less than half of their current global real estate portfolios are either “green” or “sustainable”.

For executives, realizing these ambitions will require “a major shift in real estate strategy,” said Durrani. Meanwhile, the message to landlords is “loud and clear: Green buildings are becoming an important battlefield in the post-Covid economy”.

“The big question for landlords across the region will be to make the cost-benefit analysis of greening their portfolios to meet changing business expectations. Since investors and companies are increasingly including the eco-balance of a building in their decision-making, it is clear that the saleability and rentability of buildings without an eco-rating will be negatively influenced in the medium to long term. ”

Knight Frank’s real estate and carbon footprint database shows that some office landscapes in the region are better prepared for change than others. The United Arab Emirates, for example, are classified as “relatively well prepared”, the emirate currently houses 869 environmentally friendly buildings, the 14th highest national concentration in the world and the only Middle Eastern country in the region among the top 30.

Important economic centers such as New York and London show the way. Qatar ranks 32nd with 140 green-rated buildings, while Saudi Arabia (54th) has 38 green-rated buildings. Kuwait and Oman each have 12 green accredited buildings and are 69th and 70th respectively.

Durrani added, “Developers and landlords in the Middle East have made great strides in delivering the world’s leading green buildings that incorporate impressive technologies like the condensation harvesting system on the Burj Khalifa or the three integrated wind turbines on the Bahrain World Trade Center, but such Technologies must be deployed on a larger scale if landlords want to compete for increasingly environmentally conscious companies on the same terms.