Cover story: How Magnom Properties is keen to invest in the future
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Cover story: How Magnom Properties is keen to invest in the future

Cover story: How Magnom Properties is keen to invest in the future

The real estate arm of Saudi conglomerate, Rawabi Holding, is looking to be part of the solution on climate change


One of the most unique factors behind a diversification strategy is the core reason for its pursuit.

For Saudi-based conglomerate Rawabi Holding, the intent to diversify into real estate was pegged to a broader vision – creating dynamic environments that would cater to the evolving needs of businesses and individuals in the years to come.

This goal drove the company to establish its real estate arm, Magnom Properties, last year.

Read: Saudi’s Rawabi Holding expands into real estate

The newly established business was mandated to oversee the construction of a roster of innovative, yet sustainable, real estate projects across Saudi Arabia, Egypt and the Middle East and North Africa (MENA) region.

Less than a year into its inception, Magnom Properties announced its inaugural endeavour – a zero-carbon commercial tower, nestled in the Egyptian capital of Cairo, in collaboration with media brand Forbes. The plan was unveiled to the international community at the World Economic Forum 2023 meeting in the Swiss town of Davos.

The planned Forbes International Tower will be located in the northern central business district of Cairo’s new administrative capital, and would host 50 floors of office space, complemented by two storeys of retail offerings upon completion.

“Egypt’s new administrative capital is a growth hub for future generations and is integral to achieving the long-term strategic goals of sustainable development in line with the country’s Vision 2030. The mega projects in this new capital are specifically designed to meet the needs of the people, and are flexible enough to adapt to future changes,” explains Othman A Ibrahim, chief executive officer of Rawabi Holding and vice chairman of Magnom Properties.

Construction timelines and financial details of the project would be revealed in due course, he added.

The company has roped in design firm Adrian Smith + Gordon Gill Architecture for its inaugural venture, famed for designing the Jeddah Tower, the Al Wasl Plaza’s dome, Astana World Expo 2017, Dubai’s Burj Vista and New York City’s Central Park Tower. Magnom has also partnered with French contemporary artist Richard Orlinksi, whose collection of animal-inspired resin sculptures will debut at the tower.

“This collaboration reflects our shared belief in the power of art to build bridges between cultures and unite communities,” adds Ibrahim.

The tower is not only Magnom’s debut venture, but also marks the first time Forbes has branded a commercial building. The media company forayed into the property space in 2020, when it established its first real estate brokerage business – Forbes Global Properties. Other than real estate, its brand extensions include education and financial services licence agreements.

As a company, Forbes is committed to creating impact around the world, Ibrahim says. “Together with our partner, we are exploring low-carbon pathways and putting the spotlight on the need for embracing sustainability as a key consideration in urban design.”

Broader view
Rawabi Holdings’ foray into real estate is not without good reason.

The sector has been a key facilitator of the region’s non-oil economy, and with business activities rebounding from the throes of the Covid-19 pandemic, the region’s real estate and construction landscape has displaced a steady momentum.

Government initiatives have also propelled the industry. According to services firm JLL, across the Middle East, vision programmes are contributing to growing construction activity and generating a busy projects market. That said, global challenges continue to exist, with economic and geopolitical headwinds expected to weigh on overall economic activity. Global growth is projected to dip to 2.9 per cent in 2023, from an estimated 3.4 per cent last year, the International Monetary Fund said in the January 2023 World Economic Outlook Update.

However, growth in the Middle East and Central Asia region is projected at 3.2 per cent in 2023, outpacing global numbers.

“Strong economic fundamentals are driving robust growth in the MENA region, including in Egypt, where urbanisation needs are continuing to drive project decisions. Egypt’s construction sector looks set for another year of growth and there are increased opportunities for real estate developers to fi nd and deliver long-term projects in the country,” explains Ibrahim.

“The new administrative capital – the site of the upcoming Forbes International Tower – is shaping up to be the largest urban community in the world. We believe that investing in such mega projects is critical to further catalyse the economy, enhance opportunities for job creation and support ancillary sectors,” he adds.

Tall order
While the construction sector is key to economic development, related activities propel energy demand as well as contribute to greenhouse gas emissions.

The buildings and construction industry accounted for around 37 per cent of energy and process-related CO2 emissions in 2021, a report by Global Alliance for Buildings and Construction, revealed.

Though investment in energy efficiency within the global buildings sector rose 16 per cent year-on-year to reach $237bn in 2021, growth in floor space topped efforts on energy efficiency.

Furthermore, operational energy-related carbon dioxide emissions from buildings grew by around 5 per cent in 2021 compared to the previous year, the 2022 Global Status Report for Buildings and Construction report further identified.

The planet is expected to add 230 billion square metres in new buildings by 2060, according to estimates. For scale, that is adding the equivalent of Paris to the world every week. With urbanisation set to rise and cities expected to become dense in the coming years, the construction sector has no time to spare in adopting environmentally sustainable solutions.

These not only include new eco-friendly structures and effective management to ensure environmental governance but also warrant an increase in investments to improve the energy efficiency of existing buildings.

“Research has shown that buildings consume more energy than any other sector. Investing in greener buildings will not only be a stimulus for the economy and benefit employees, bottom lines and investors, but will also play a critical role in our transition to a lower-carbon future. With rapid urbanisation in the region and to build cities of the future, prioritising a sustainable construction sector is pivotal to drive long-term impact for the people and the planet,” adds Ibrahim.

Thinking green
Magnom Properties is developing the zero-carbon tower to be part of the solution on climate change. The project will deploy a solar panel rooftop, automated HVAC (heating, ventilation, and air conditioning) field devices and a host of intelligent building technological solutions.

The use of biophilic designs will not only beckon nature but assist in air circulation and elevate holistic workforce wellbeing.

“The tower is an innovative example of responsible, energy efficient, carbon reduction design that will lay the sustainable framework for tall buildings in the future. It is people-centric and pushes the boundaries of modern construction to pursue a zero-carbon strategy,” says Ibrahim.

However, constructing green buildings does come with its own set of challenges.

“The initial upfront costs of a high-performance building and the lack of reliable models to understand the real costs and benefits of sustainable projects are key challenges that are barriers to a more widespread adoption of sustainable practices in the construction sector,” asserts Ibrahim.

That said, the benefits of eco-friendly structures are enduring and make long-term business sense. “Green buildings are both environmentally sustainable and bring tremendous economic savings for developers and end users. Studies estimate that sustainably constructed buildings can achieve at least 25 per cent energy savings, 34 per cent lower CO2 emissions, 11 per cent or more of water-savings compared to conventional buildings and divert more than 80 million tonnes of waste from landfills. While initial construction costs may be more expensive when compared to standard offerings, green buildings reduce day-to-day costs year-over-year, thus delivering better returns on investment through lower operating and energy costs in the long-term and significantly improving asset value,” he adds.

Despite the company’s inherent focus on its new undertaking, Magnom Properties aims to chalk out a roadmap for its future endeavours, which include launching its next commercial real estate project in Saudi,
followed by Dubai, in the UAE.

The company is also exploring other Gulf countries for relevant opportunities.

“Irrespective of where our projects are located, we will seek solutions to climate change and our design approach will adhere to certain key features, which include human-centricity, resilience and future readiness, low carbon emissions, efficiency and value,” notes Ibrahim.

However, operationally, the company’s bailiwick for the present and imminent future is slightly lean.

“Although we aim to build high-value commercial, residential and lifestyle projects in line with our vision, our current focus is only on commercial and retail sectors. When the opportunity arises and with the right partners, we may explore residential developments at a later stage,” he adds.

Magnom Properties is also pursuing initiatives outside its business purview, but ones that are in lockstep with its holistic vision of creating better societies.

To advance local communities in Egypt, it recently entered into a partnership with UNICEF.

“Our new partnership with UNICEF aims to improve the lives of young people in Egypt and bridge the digital divide and gender gap by providing a wide range of skills development opportunities for both young girls and boys. This is in line with Egypt’s Vision 2030, which aims to provide internet access to less connected communities across the country and empower them with the tools needed to build and thrive in a 21st century workplace,” elaborates Ibrahim.

“Our collaboration will help facilitate access to information and digital training to young people, especially girls, to equip them with the necessary skills for better career opportunities and prospects of their choice,” adds.

In terms of empowering women and encouraging gender equality, Magnom Properties has been handed down a strong legacy – its parent company started recruiting female employees in the mid-nineties, an outlier move at the time.

Rawabi Holding has only grown in its commitment, with 45 per cent of its current board seats occupied by women, and females making up 40 per cent of its corporate staff.

“This sends out a strong message that we take women empowerment seriously, and it is a legacy we aim to continue at Magnom,” states Ibrahim.

From sustainable business endeavours to community-centric initiatives, Magnom Properties aspires for a better future. And is focused on investing in it.

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