Interview: Mazen Hawwa

In what ways has the Covid-19 pandemic changed the real estate business, and where do you see opportunities for growth moving forwards?

MAZEN HAWWA: The priority for a private real estate development company is to maintain the client’s trust and deliver on business agreements, and safeguard shareholders’ interests while preserving the required financing and liquidity to continue operations successfully.

As a result of the pandemic, the market experienced a shift in client preferences related to lifestyle and environmental concerns. In particular, a link has evolved between real estate development and the surrounding environment, as demand increases for more environmentally friendly practices in construction processes and higher-quality materials. Similarly, many clients have realised they prefer living within a community – such as in a compound – rather than in bigger houses that are more isolated. This is why the opportunity moving forwards is to develop mixed-use developments that create a live-work-play lifestyle with residential, retail, entertainment and dining outlets, as well as ample shared spaces surrounded by nature.

The pandemic came in the middle of a management restructuring, with intentions to implement a new strategy and transform URC to ensure continued growth in an increasingly competitive local market. In the end, the company was able to navigate such challenges by taking proactive measures and adhering to guidelines set forth by the authorities, particularly in the area of health and safety.

What can be done to maximise returns when implementing environmental, social and governance (ESG) policies in the real estate sector?

HAWWA: Adherence to ESG principles is growing globally, and in Kuwait this trend is starting to have an impact on the way companies design their growth strategies. However, local businesses have significant room to expand their ESG plans and integrate ESG policies into their day-to-day operations. At the same time, it would be beneficial for the real estate sector if the government provided the means and incentives to further encourage companies to invest in developing ESG strategies. ESG adoption is a long-term undertaking, and although the initial costs of complying and adhering to international ESG standards may be high, it certainly will be beneficial in the long run.

How will the real estate sector contribute to realising New Kuwait 2035, and how can private firms help develop the local market?

HAWWA: New Kuwait 2035 aims to diversify the national economy and foster greater participation from the private sector, allowing both public and private entities to address the challenges ahead together. As private real estate firms, we have an essential role to play in promoting and ensuring the well-being of citizens, which is an objective of the 2035 vision.

There is a shortage of residential homes in Kuwait, and customers are shifting their preferences from luxury units to more cost-friendly and value-added solutions to their real estate investment or housing needs. For example, we are seeing citizens start to look at vertical homes as a viable option, as opposed to large houses that have traditionally been popular.

Tastes are rapidly changing, and while the strategies implemented by the government are positively impacting the market, the private sector can contribute to accelerating growth. This is where partnerships can work to develop the sector in line with current needs. In this sense, promoting and facilitating more public-private partnerships (PPPs) in master-plan residential developments presents one possible solution to meeting sector objectives. There is an opportunity for further collaboration between the government and private companies, which means that the PPP housing scheme has room to expand to reach its full potential and be a viable solution to the current housing crisis.