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As a result of the fact that the annual MECSC convention in Dubai is now in full swing, and with the conversations reverberating with the topics of trends both old and more importantly new, I thought it was an opportune time to revisit a favourite topic of mine.
This is something that I believe we will begin to see, and hear much more of through the retail industry in the coming years, and consequently well worth a revisit. Retail sustainability is a trend that, although having global implications, is having a considerably smaller ripple effect outside the main retail markets that I would have thought possible.
Data from markets in other parts of the world have proved in a short time that commercial retail spaces, which posses strong green credentials, almost always result in higher occupancy levels, increased rental rates and lower operating costs. Some of the world's largest retailers, such as Wal-Mart and Target, have made commitments to market and developmental sustainability programmes within their new developments; and with the obvious improvements to their bottomline, why wouldn't they?
So, if all of the tangible benefits are there for the developers, and as a result of their increased commitments, consumers can be part of a more sustainably aware shopping audience and experience, what is stopping the Middle East retail markets in grabbing this opportunity?
At first, I tended to think that it was simply an issue of timing. As the sustainability bandwagon had begun to gather significant momentum elsewhere, many of the major developments in the region had already been announced and consequently it was too late for them to latch on to this way of thinking. However, many things can change over the course of a developments' lifecycle and embedding a sustainable belief and commitment really wouldn't be that difficult in the short term, to ultimately drive a long term market stance of sustainability.
Approach
I then thought that if anything, there could be a sense of 'if it ain't broke don't fix it' throughout the regional markets. Real estate is generally considered to be riding the crest of a wave here and consequently, if sales remain strong, that there could be a sense of apathy towards a step change in the approach towards new stock going to market. After all, why complicate these strong markets with unnecessary jargon and building regulations that could hurt the developers' return on investments?
I think it's a combination of these factors and more. The markets here are always a little reactive because of the nature of how quickly they are evolving. As a result, we're very good at taking a known concept and giving it a bit of a shake up or an overhaul. However we're a little more sceptical of radical step changes, and unfortunately the issue of sustainability is just that. The upshot of this is that because we are a little bit behind with this green movement and possibly still a bit naive, the tendency has been for the retail markets to stick to what they know best.
I hope, therefore, that this year's MECSC convention sees the announcement of the first truly sustainable retail development that can then set a precedent for the region's retail sector, as one that truly begins to embrace this global movement towards a greener retail environment.
- The writer is Head of GRMC Retail Services, Dubai.
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