< Previous20 CEO MIDDLE EAST FEBRUARY 2023 COVER STORYFEBRUARY 2023 CEO MIDDLE EAST 21 n line with the objectives of Saudi Arabia’s Vision 2030, more specifically toward achieving a sustainable and com- petitive economy in an inclusive and vibrant environment while following the growing concept of “destination- making”, Umm Al Qura for Develop- ment & Construction, owner and developer of Masar, a visionary landmark committed to enriching the quality of life through a diverse range of offerings; all while preserving the spiritual nature and cultural heritage of the holy city. Yasser Abuateek, CEO of Umm Al Qura for Development & Construction, shares the blueprint of landmark destination. What is Masar in summary and can you tell us a little about the Destination? Masar Destination is a state-of-the- art integrated investment ecosystem MASAR IS AN EXQUISITE URBAN DESTINATION OFFERING UNPARALLELED EXPERIENCES SEAMLESSLY DESIGNED TO THE UNIQUE NEEDS OF MAKKAH RESIDENTS AND VISITORS. YASSER ABUATEEK, CEO OF UMM AL QURA FOR DEVELOPMENT & CONSTRUCTION, THE OWNER AND DEVELOPER OF MASAR DESTINATION, DIVULGES MORE ABOUT THE DEVELOPMENT AND ITS PLANS FOR THE FUTURE BY MATTHEW AMLÔT I DISCOVERING MASAR YASSER ABUATEEK “OUR GOAL AT MASAR IS TO ENHANCE THE EXPERIENCE OF THE VISITOR AND THE RESIDENT BY ENHANCING THEIR HOLISTIC AND SPIRITUAL EXPERIENCE”22 CEO MIDDLE EAST FEBRUARY 2023 Landmark project. Masar destination is located in west Makkah, extending from the Third Ring Road (Othmaan bin Affan Road) to the west, and passing over the First Ring Road to end at the western outskirts of the Holy Mosque 6 MILLION SQ M The total number of build-up flats across the Masar Destination COVER STORY | YASSER ABUATEEK with diverse and flexible opportunities located at the heart of Makkah; to be precise, it is in West Makkah, extend- ing from the Third Ring Road (Oth- man bin Affan Road) to the West, and passing over the first Ring Road to end at the Western outskirts of the Grand Mosque. In other words, it is strategi- cally located 550 metres away from the Holy Mosque and 100 metres away from the Haramain Station. It extends over 1.2 million square metres and is distinguished by a central pedestrian boulevard that runs through the desti- nation connecting all campus areas. The main development idea of the destination is based on the concept of comprehensive movement of vehicles and pedestrians in parallel. With com- mercial and retail facilities, hotels, residential buildings, car parking, a hospital as well as public amenities, this signature urban destination will support religious, social and commer- cial activities to both Hajj and Umrah pilgrims, as well as to the other visitors and residents of the city. What does the term “Destina- tion-Making” mean to you, and how does it apply to Masar? Destination-making focuses on designing and activating an interac- tive destination that continuously develops unique experiences that cater to humanity’s needs and the ever-evolving trends of the future. The concept of “destination making” is evidently embedded in Masar as it has planned the destination follow- ing leading global practices of urban planning and design that is fit for the next 100 years. The role of a destination maker is different from that of a traditional real estate developer, which often ends with the delivery of the final product without considering the subsequent stages. Masar is a destination that allows you to live, work, and enjoy the heart of the holy city, meaning an integrated life system and a vibrant community (jobs, hotels, restaurants, cafes, museums, and a pedestrian walkway with a length of 3.5 kilome- tres and a width of 60 metres with different activities and events. Masar accommodates all residents and visitors means of comfort, housing, FEBRUARY 2023 CEO MIDDLE EAST 23 YASSER ABUATEEK | COVER STORY Ideal community. Masar is a combination of residential, hospitality (hotels and hotel apartments), commercial and administrative developments that feature all necessary services health, entertainment, mall facility and hospitality. Talk to us about building sustainable best practices into the heart of Masar Destination? Saudi leadership has a vision to ac- commodate 30 million visitors to Mak- kah annually; we started to create the destination based on visitor demand and needs. Therefore, Masar Destina- tion is not a project; but an integrated investment ecosystem. We at Umm Al Qura offer 205 development plots for investors to pro- vide a state-of-the-art services within their sector, whether it is a commercial complex, a healthcare facility – hos- pital or residential complexes. We fa- cilitate investors with services such as electricity, supplies and central cooling to assure global standards. Masar Destination has prime sustainability targets and Umm Al Qura for Devel- opment & Construction is working with a developmental vision to elevate the urban and investment landscape of Makkah through establishing new avenues to help enhance the quality of life for residents, pilgrims and visitors. You just position Masar Destination as a holistic investment ecosystem; can you kindly elaborate on that? One of the core strategic pillars of Masar Destination is to attract insti- tutional investments across multiple sectors. This system comes with various investment channels and flexible solutions aimed at attracting institutional investment in several pivotal sectors, supported by the quality of its facilities and services; this is to enrich the quality of life and enhance the experience of the residents and visitors of Makkah in accordance with the best standards of international destinations. Makkah is already an attractive destination, Masar will further attract long-term institutional investment which will contribute to Makkah’s GDB as a new investment base. We are proud that this vision is now an on-ground reality; 2022 was an excep- tional year, where the company tran- sitioned from injecting funds into the infrastructure, to attracting a volume of investments that reached SAR 35bn ($9.32bn) in various sectors. The first investment package constituted 21 percent of the total investment real estate plots. Masar allocated 690 square metres of land allocated for development. Investments “ONE OF THE CORE PILLARS OF MASAR IS TO ATTRACT INSTITUTIONAL INVESTMENTS ACROSS MULTIPLE SECTORS”24 CEO MIDDLE EAST FEBRUARY 2023 COVER STORY | YASSER ABUATEEK in the destination include 11 residential and eight hotel towers with two inter- national players, and two commercial centres with an area of closed shopping space exceeding 94,000 square metres. Financing also include a medical facil- ity (hospital), a dialysis centre and a cancer treatment centre. Furthermore, investments are prolonged include a recreational area that extends up to 158,000 square metres that aims at enriching the experience of the visitors, pilgrims and residents of the holy city. What impact will Masar have on Makkah’s job market? According to conducted studies, the destination will contribute to the job market by providing more than tens of thousands direct and indirect jobs. With massive investments, Umm Al Qura is moving forward in de- veloping the SAR100bn ($26.6bn) destination which is likely to raise Makkah’s GDP to unimaginable heights which contributing to the kingdom’s tremendous efforts to enrich the experience of Muslims around the globe as they step on the sacred land of the holy city. This is what ignites our passion at Umm Al Qura and what motivates us to focus on the smallest details. Future living. Ensuring the smooth and parallel movement of vehicles and pedestrians is of paramount importance to the Masar Destination Employment. The destination will provide more than 16,000 direct and indirect jobsFEBRUARY 2023 CEO MIDDLE EAST 25 YASSER ABUATEEK | COVER STORY What role is Masar playing in the development of Saudi Arabia’s tourism strategy in the context of Vision 2030? Masar is creating an integrated destination that will contribute to achieving Vision 2030’s goals of providing the best services to Hajj and Umrah pilgrims while improv- ing the lives of residents. We believe that real estate development is a fundamental pillar of Vision 2030 that tackles all elements to improve the quality of life. Our goal at Masar is to improve the experience of the visitor and the resident by improv- ing their holistic and spiritual expe- rience. Hence, we are keen on creat- ing a comprehensive and sustainable investment system. We did not rely on reinventing the wheel, instead we benefited from investors’ previous expertise in their field. The year 2022 was a remarkable year, can you share with us the accomplishment till date on Masar Destination and how 2023 is shaping up? As mentioned, 2022 was an ex- ceptional year for Masar, as the destination transitioned from heavy investments in infrastructure to at- tracting investments in several sec- tors, including health, hospitality, housing, and commerce, in addition to investments aimed at enriching the quality of life. We closed the year with great results: the completion rates of the infrastructure of Masar are at 92 per- cent by end of 2022; a vital achieve- ment in the building of a landmark that will contribute to enhancing the quality of life of the residents and visitors of Makkah. We started the construction work for the first premiere package of hotel projects with global operators; the agreement boasts the famous hospi- tality brand Kempinski and the inter- national Taj chain for the first time in Makkah. They will be operating two five-star towers and one Kempinski residential tower. This hospitality package occupies a select location in the central area of Makkah, which is only about 500 me- tres away from the Holy Mosque, an investment package value of nearly $2bn, which will of course contribute effectively to achieving the kingdom’s Vision 2030 goal. We look forward to more achievements in 2023 and some grand announcements. “MASAR IS CREATING A DESTINATION THAT WILL HELP ACHIEVE VISION 2030’S GOALS OF PROVIDING THE BEST SERVICES TO PILGRIMS” Ease of movement. Footpaths are linked to pedestrian that integrate with the neighbourhood’s design26 CEO MIDDLE EAST FEBRUARY 2023 ith global environmental, social, and governance (ESG) assets on track to exceed $50 trillion by 2025, sustainability is top of mind around the world from asset man- agement firms to corporate boardrooms and governments. The Middle East is no exception, with major governments committed to net zero carbon targets and many companies rapidly improv- ing their ESG disclosure practices and standards. The region has both the po- tential and a strong desire to contribute much more to the cause of sustainabil- ity, as some other regions are doing. The uptake of ESG in the Middle East is being driven by many factors. Firstly, many governments are well aware that sustainability and green initiatives are essential not just for the environment and people’s wellbeing, but for economic growth. Secondly, regional as well as international inves- tors are increasingly using ESG metrics within their investment decisions, to not only assess risks, but to identify real-world impacts of corporate opera- tions and future investment opportuni- ties. Thirdly, regional consumers are demanding sustainability in the prod- ucts and services that they buy. Recent reports show that sustainability factors affect Middle East consumers’ deci- sions more than their global peers (31 percent in the Middle East, compared with 18 percent globally). From a listed or issuer company’s perspective, the three main pillars of sustainability are target setting, per- formance management, and reporting. Many companies in the Middle East are now embedding these in their corporate strategy and behaviour. Regional stock exchanges have tak- en significant steps to improve report- ing. Dubai Financial Market (DFM) published its Guide on Environmental, Social and Governance (ESG) Report- ing in 2019, while the Bahrain Bourse published its ESG Reporting Guide in 2020 and the Saudi Exchange’s ESG Disclosure Guidelines was released in 2021. The UAE is the first country in the region to mandate formal reporting requirements for issuers, with the UAE Securities and Commodities Authority now requiring companies listed on the DFM and ADX to adhere to certain ESG disclosure norms and publish sustainability reports. Some positive momentum on ESG in the region is tempered by the challenges ahead, writes Diana Estupinan, Chief Operating Offi cer, Instinctif Partners ESG DISCLOSURE STILL A WORK IN PROGRESS Taking action. Many companies in the Middle East are increasingly considering a ‘triple bottom line’ approach as they expand their ESG commitment, Estupinan says SUSTAINABILITY W $2 TRILLION The cumulative GDP contribution of green investments in six key GCC industries by 2030, according to a study by Strategy&FEBRUARY 2023 CEO MIDDLE EAST 27 SUSTAINABILITY Disclosure. The UAE is the first country in the region to mandate formal reporting requirements for issuers Mandatory reporting can be very helpful to both companies and inves- tors, as it provides a clear framework for them to follow so that different entities can be compared with each other using the same metrics. One of the problems faced by the sustainability movement globally and in the region is fragmentation of standards, including a variety of non-government as well as government frameworks. Whichever sustainability framework companies in the region use, before reporting they should follow a sys- tematic approach with comprehensive internal ESG processes and strategy. They should then be able to meet inves- tor expectations of third-party audits, follow-up meetings, and science- backed targets. Companies also need to understand the different frameworks used by asset managers including their screening mechanisms and sector and country-based exclusions, as well as engagement requirements. The good news for some companies in the region is that for now many investors are over- looking low ESG scores and high CO2 emissions, and instead are keen to work with such companies to understand their sustainability journey and provide them with support. Fortunately, there are clear moves globally towards standardisation of reporting. In the future, it seems likely that the International Sustainability Standards Board (ISSB) will become the global gatekeeper of ESG disclo- sures. The ISSB was established at the COP26 climate conference in 2021 and includes climate-specific disclosures as well as general sustainability. Increasing standardisation and thus transparency will help allay a host of misgivings that investors often have about companies, ranging from supply- chain monitoring to accurate emissions reporting. Investors’ decision-making will improve and companies that de- serve investment will be more likely to have it allocated to them, especially if they frequently tell their ESG story and Additionally, applying the same fac- tors to companies in different regions and industries with varying business practices can be problematic, as com- panies have different business models, and different regions have different challenges that need to be considered when it comes to data quality, espe- cially in emerging markets such as the GCC. All in all, the ESG approach should be unique to every company. Many companies in the Middle East are increasingly considering a ‘triple bottom line’ approach as they expand their ESG commitment. This concept includes social and environmental impacts in addition to financial per- formance. It can be broken down into ‘profit, people, and the planet’. While in western countries, ESG is mainly driven by the demands of asset managers, financial institutions and corporate decision-makers, in the Middle East it remains for the moment more driven by regulators. The balance in the region is changing however, as investors and companies themselves embrace sustainability more fully. demonstrate its progress to investors, both through the earnings cycle and one-on-one meetings. Standardising ESG reporting and making it mandatory nonetheless does not come without limitations. Not all ESG metrics can be quantified and they may not directly translate into enhanced corporate earnings or per- formance. Also, current sustainability disclosures are often biased towards process and procedures, not towards actual performance. “REGIONAL CONSUMERS ARE DEMANDING SUSTAINABILITY IN THE PRODUCTS AND SERVICES THAT THEY BUY”28 CEO MIDDLE EAST FEBRUARY 2023 the Middle East, and North Africa (MENA) is among the most vulnerable to its effects. Warming at twice the global aver- age, it is projected to be up to 4°C warmer by 2050. Compounded by food security, droughts and pollution, this threat is a major risk to human inhabitability in many cities by the end of the century. To mitigate this, we know that many countries across the region have begun integrating climate commitments into their strategic planning, with the UAE and Oman setting goals to achieve net zero by 2050, and the Saudi Green Ini- tiative aiming for net zero by 2060. If there’s a message I’ve taken away from COP27, and something I’ll carry into the new year, it’s that we cannot continue to work in silos to save the planet, and we need to pull in the same direction and be decisive. Sustainable investment must be prioritised if we are to successfully meet climate goals in the Middle East, and this is where cross-sector coopera- tion comes into play. A robust regu- latory framework for climate action accompanied by strategic action from non-governmental stakeholders is no longer a ‘nice to have’, it’s a must. Mutual benefit hiding in plain sight Activating imminent collaborations between the public and private sector, and rallying towards a common goal, will be the recipe for success for effec- tive climate action in 2023 and beyond. While the government is the foundation of a country’s climate ambitions, the private sector is its engine of innovation and project development. What’s promising is that the UAE is no stranger to the benefits of public- private partnerships, and recently announced a new law in order to help regulate them and increase the invest- ment going into such projects. With the new law in full swing in 2023, the PPP (public-private partner- The mounting climate crisis calls for more fi nancing and leveraging public-private partnerships BATTLING CLIMATE CHANGE WITH COLLABORATION Decarbonisation. Mesmar says a route towards net zero is by introducing regulatory mandates that reduce collective carbon emissions from various industries SUSTAINABILITY BY FARIS MESMAR, CEO AND MANAGING PARTNER OF HATCH & BOOST VENTURES 50% The proportion of the food consumed in the UAE to be locally produced by 2051, according to the UAE National Food Security Strategy n the sidelines of COP27, the United Nations announced a catastrophic acceleration in global warming and signalled that our window to act is closing, unleash- ing climate chaos and panic across the planet. While no region will evade the consequences of a warming planet, IFEBRUARY 2023 CEO MIDDLE EAST 29 SUSTAINABILITY For the planet. The UAE shares COP28’s objectives of achieving sustainability and enabling action towards climate security ship) model in the UAE can be used to address funding gaps and allow finite governmental resources to be real- located where they are really needed. In my opinion, funding innovative solutions that directly tackle climate related issues is where the government’s attention needs to be going. This is especially relevant ahead of the UAE hosting COP28, later this year. However, there’s still a funding gap to be addressed, and it’s clear that more funding into startups and digital innovation is needed for climate adaptation as risks mount. A recent report by McKinsey on financing the transition to net zero by 2050 said that achieving the net zero transition would require an additional $3.5 trillion of capital a year. The government and the private sector will mutually benefit from increased access to funds, and this will contribute to the growth of innova- tion hubs. The investors and startups operating within these networks need the support of the public sector to unlock government funding and capital networks, while the government needs to work with such innovators to help reach their sustainability goals. Another route towards net zero is by introducing regulatory mandates that reduce collective carbon emis- sions from various industries. For example, the UAE’s agritech sector has been catapulted to the top of the nation’s priority list following food security concerns brought about by the Covid pandemic, and commod- ity prices rising due to the impact of recent global events on food distribu- tion and supply chains. In line with the UAE National Food Security Strategy, the goal is to have 50 percent of the food consumed in the Emirates to be locally produced by 2051, compared to 20 percent in 2022. The role of climate-focused startups As the powerful role traditionally In ideating concepts and boosting them into early-stage startups, we can support government initiatives that are working hard to make sustainable ambitions a reality. For example, we recently launched our first portfolio agritech startup to help governments in the Middle East region enhance food security, fight emissions, and meet net- zero targets – and we are by no means the only ones helping to facilitate public-private success stories. Looking to the future Climate change can only be solved by the mobilisation of all sectors of the economy. As we look towards COP28, we must collectively increase the number of public-private partnerships already taking place within the UAE and the wider region, such as those within the food, transportation, waste, and energy sectors. We’re fortunate to have a govern- ment committed to innovation, growth and supporting startups which are helping our nation to fulfil its climate commitments sooner. The only challenge left now is to get everyone else on board. played by governments in fostering private-sector innovation is expanding, startups need to be taking full advan- tage of a wide range of governmental support, both traditional and new. Climate-consciousness has an es- sential role to play here, and startups everywhere need to be ideating based on solutions towards climate change. At hatch & boost Ventures, we have built our venture-building model around this tenet. Focusing on a sector-agnostic venture building model to breed and scale climate tech and sustainable startups and environmental considera- tions form part of everything we do. “STARTUPS NEED TO BE IDEATING BASED ON SOLUTIONS TOWARDS CLIMATE CHANGE”Next >