Future visions for sustainability in Abu Dhabi and Dubai outlined



DUBAI // Less traffic and more community areas focused on sustainability and the environment were some of the main features in the future visions of Abu Dhabi and Dubai as smart cities.

But streets, pavements and residential areas will have to be evaluated to be able to accommodate the necessary changes.

“They have to be reviewed, as roads were built for other purposes rather than walking or cycling, 40 years ago,” said Falah Al Ahbabi, director general of the Abu Dhabi Urban Planning Council.

“The future of the city of Abu Dhabi and its vision is to create a sustainable city where services are constantly answering the problems of citizens; citizens are happy, transport is sustainable, and we will have private vehicles that will cover part of transportation.

“We are also focusing on the environment, including marine life and wildlife.”

He said that although technology changes every three to four years, suitable infrastructure was put in place to benefit future smart cities.

“One of our goals is to have developed streets, from pavements to public transport,” said Mr Al Ahbabi. “We want harmony between the environment, the city and its streets, and we wanted to provide all services in no more than 10 seconds.”

According to the United Nations, 70 per cent of the world population will be living in cities by 2030. Both Abu Dhabi and Dubai have ranked high in providing smart services to their residents, but more needs to be done to improve living conditions.

“There is a preference for grid systems like in New York, Abu Dhabi and Portland,” said Mr Ahbabi. “It helps with ease of transport and walking around. Transport and infrastructure are essential and we cannot neglect entry and exit points, so there should always be a specific plan and structure.”

He said it would be beneficial if residents were to adopt public transport almost exclusively.

“Cities cannot continue with only highways, tunnels and bridges during the next 10 years,” he said. “So it’s very important to focus on this to ensure the city’s sustainability. Today our objective is to achieve liveable cities so we have to reorganise traffic for that objective, to help the elderly and children in the coming 10 to 15 years.”

The scenario is similar in Dubai. Hussain Lootah, director general of Dubai Municipality, said: “Sustainability is an essential element to shifting to a smart city.

“Humans used to do everything with their own hands at first. Then there was machinery and man became the operator, while in the future, men will be in the final ranks and the smart systems will manage people’s lives. Men will start focusing on innovation, creation and outside the common space we live in.”

But the city will need reshaping through its infrastructure to meet development needs.

“We have to go into laws and regulations to limit the number of cars in the streets,” Mr Lootah said. “We need to focus on communities. Some companies provide buses for their employees, while some housing units can be placed closer to work.”

Studies are needed into the projected age of the population and the needs of the elderly, children and those with special needs.

“We have to build a database,” he said. “We cannot undertake a lot of smart activities and planning if we don’t have a proper database as it is the main tool for any system today.”

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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