'Luxury homes are not enough': Why millionaires in UAE are now demanding sustainable communities

The rise in investment in sustainable real estate funds by high net-worth individuals underscores the growing demand for developments that blend luxury with eco-conscious living

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Photo: WAM File

By Neeraj Mishra

Published: Sun 3 Nov 2024, 9:52 AM

Last updated: Sun 10 Nov 2024, 3:13 PM

The notion of luxury in real estate is undergoing a profound transformation. No longer satisfied with opulent mansions or exclusive penthouses, high-net-worth individuals (HNWIs) are shifting their focus toward sustainable communities that offer an enriched lifestyle while addressing global environmental concerns.

Recent surveys, such as Knight Frank's Wealth Report, show that the majority of HNWIs consider environmental and sustainability factors crucial when purchasing property. Luxury real estate firms like Sotheby’s International Realty and Christie’s International Real Estate have reported a significant uptick in inquiries for properties within sustainable communities, signalling a clear preference shift. Additionally, the rise in investment in sustainable real estate funds by HNWIs, as highlighted in the Global Sustainable Investment Review, underscores the growing demand for developments that blend luxury with eco-conscious living.

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This evolution marks a departure from the traditional trappings of wealth and points towards a future where luxury is defined not just by indulgence but by thoughtful living and responsible stewardship of the planet.

Neeraj Mishra

HNWIs have always been trendsetters, and their latest demand is reshaping the luxury real estate market. Their preference for sustainable communities over conventional luxury properties reflects a growing awareness of how individual choices impact the environment. This demographic is acutely aware of the pressing issues of climate change, resource scarcity, and social responsibility. The appetite for homes that not only offer comfort and exclusivity but also align with these values is growing. Developers and investors who fail to recognise this shift risk being left behind in an industry increasingly guided by ethics and long-term vision.

Developments like Al Barari in Dubai are a prime example of this paradigm shift. This community integrates high-end living with green spaces, renewable energy, and a holistic approach to health and well-being. It offers more than just lavish amenities, providing a framework for a lifestyle that promotes balance and harmony with nature. Such projects resonate deeply with HNWIs, who are looking beyond personal gain to leave a legacy that fosters sustainability and community.

There is a broader implication to this movement. When HNWIs invest in sustainable communities, they send a powerful message to the market and the world. This demand catalyses change, prompting developers to innovate and governments to implement policies that encourage sustainable urban development. It creates a ripple effect, influencing middle-market properties and driving a more significant societal shift towards eco-conscious living.

Moreover, the shift towards sustainable communities aligns with a desire for long-term investment security. Properties built on the principles of sustainability and resilience are likely to retain and even increase their value as environmental regulations tighten and consumer preferences evolve. They represent a hedge against future risks, such as rising energy costs and the economic impacts of climate change. In contrast, luxury properties that lack sustainability features may become less desirable and potentially suffer in market value.

Beyond environmental considerations, sustainable communities offer something increasingly coveted — quality of life. HNWIs are placing a premium on health and well-being, seeking environments that provide clean air, open spaces, and opportunities for social interaction. Sustainable communities offer amenities like organic farms, wellness centres, and nature trails, which contribute to a holistic living experience. This focus on well-being is a marked departure from the isolated luxury often associated with gated mansions and high-rise penthouses.

Furthermore, the drive towards sustainable communities reflects a broader commitment to social responsibility. Many HNWIs are actively involved in philanthropy and impact investing, looking to make a difference in the world. Investing in sustainable real estate aligns with their desire to support initiatives that contribute to the greater good. Such investments are not merely transactions but statements of intent to build a future where prosperity does not come at the expense of the planet or society.

The rise of sustainable communities presents both a challenge and an opportunity for developers and investors. Meeting the demands of HNWIs requires rethinking traditional development models. It's no longer sufficient to offer a luxury property adorned with the latest gadgets. The focus must shift to creating living environments that are smart, eco-friendly, and resilient. This involves incorporating renewable energy sources, green building materials, and designs that foster community interaction while minimising environmental impact.

Neeraj Mishra is the founder and CEO of Amis Properties

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Neeraj Mishra

Published: Sun 3 Nov 2024, 9:52 AM

Last updated: Sun 10 Nov 2024, 3:13 PM

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