David von Rosen is an international investor and entrepreneur. Through the VONROSEN family office, he invests in businesses worldwide with a particular focus on renewable energy, gaming, nutrition and technology. Some of his past companies include lottery platform Lottoland, property developer 25 Degrees and fashion label VONROSEN. He splits his time between Dubai and Switzerland.
Dubai has traditionally been seen among investors as a hub for oil and defence – an unlikely location for sustainable investment opportunities. However, a combination of the politicisation of ESG in the US, cost-cutting measures in cash-strapped European businesses and a renewed focus on sustainability in the United Arab Emirates (UAE), has seen Dubai transition into a safe bet for the future of sustainable investing.
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With ESG funds in the US and UK pulling back, this has opened up a gap in the market for European investors to reap the benefits of Dubai’s responsible investment opportunities – but to do so, they must break away from the old-school view of Dubai as a place only for oil investment.
Specifically, I would like to see European investors significantly increase their investment in Dubai’s thriving real estate market and tech sector – two industries that are increasingly building responsible and sustainable targets into the heart of operations.
While corporations in the West might be scaling back their ESG commitments, it has been shown that consumers continue to value businesses that operate sustainably and responsibly – with European consumers the most scrutinous of all.
The growing commitment to sustainability among companies in Dubai provides the ideal opportunity for European companies, funds and private investors to invest in organisations that align with their ESG values.
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By GlobalDataCombined, Dubai’s real estate and construction sectors contribute 14% to the national GDP. It is a sturdy industry for investors to take a chance on, with a projected compound annual growth rate (CAGR) of more than 8% between 2024 and 2029.
European investors in this sector are swamped by their UK counterparts, underlining a need for European investors to carve out a larger space of their own in Dubai’s dynamic real estate market.
It is a similar story in Dubai’s tech sector. As the UAE’s answer to Silicon Valley, Dubai has positioned itself at the forefront of technological innovation – particularly where AI is concerned. Spurred on by momentum from supportive government initiatives, Dubai’s tech sector is tracking a solid path of growth. The UAE’s IT industry is projected to grow at a CAGR of 12.27% from now until 2029, with Dubai home to the lion’s share of the country’s tech companies.
Again, European investors are yet to make a big mark – with the US dominating investment in Dubai’s tech market.
Government initiatives like the Dubai 2040 Urban Master Plan have forced the construction and real estate industries to embed sustainable practices into the heart of their operations, as well as to prioritise sustainable housing and commercial property developments.
Meanwhile, the tech sector is seeing the innovation and development of green tech solutions – namely the rise of ‘cleantech’, with Dubai-based start-ups looking to revolutionise green energy.
The move to sustainability is also supported by the UAE’s ESG reporting framework, which has mandated ESG reporting for listed companies since 2022. This set a clear precedent, and large corporations and smaller businesses have stayed ahead of the curve and begun to follow suit.
So, at a time when multinational companies are starting to tighten their belts and scale back their ESG and sustainability initiatives, we are seeing businesses in Dubai doubling down, with ESG uptake on the rise throughout the country.
With their potential for strong returns and their increasingly strong sustainability credentials, Dubai’s top non-oil industries should be immediately attractive for responsibility-driven investors. With the US and the UK already asserting themselves as leading investors, it is also time that European investors zero in on the opportunities available.
As ESG and responsibility-driven investors take stock, pivot away from the US and consider their options going forward, Dubai should be at the top of their lists. European investors must shake off their outdated view of Dubai and recognise the myriad of sustainable investment options the Emirati city has to offer – from tech to tourism, from the luxury retail sector to green energy.
It is time for European investors to get to grips with Dubai’s responsible investment opportunities, from its cleantech start-ups to Grade A green office spaces. They should take a leaf out of UK and US investors’ books and invest heavily in Dubai’s prospering industries, and aim to catch up with – or even surpass – the investment impact of their international counterparts.
