Mazen Issam Hawwa

There is an increased focus on ESG across the GCC region. CEOs are increasingly incorporating reporting and transparency into their ESG goals. How do you think such measures will impact the financial performance of an organization?

The connection between ESG and financial performance might seem difficult. However, reports showed that it could have an indirect impact on operational costs, stock prices, risk and credit ratings, and competitive advantage. Environmental, social, and governance (ESG) considerations are becoming increasingly prevalent in investment choices throughout the world. The growing importance of a company’s ESG performance, driven by investors, consumers, the workforce, and regulators, has heightened the focus of senior executives and put ESG at the top of the corporate agenda.

Regulators worldwide are becoming more active in ESG by setting mandatory disclosure requirements to drive comparability and improve transparency for investors who may use it to evaluate potential investments based on their operational activities. In Kuwait, while ESG regulations are still not mandatory, we highly appreciate Boursa Kuwait‘s initiatives and drive in this space. Kuwait Boursa has made Vice Chairman & Group CEO, United Real Estate Co. significant progress in its efforts to promoting Corporate Sustainability by joining the Sustainable Stock Exchanges (SSE) initiative in late 2017, led by the United Nations. This membership provides Boursa Kuwait with a platform to exchange experiences and knowledge, fostering collaboration and playing a vital role to upgrade the ESG ecosystem within capital markets and stakeholders.

Expanding upon that initiative, Boursa Kuwait has recently developed and published an extensive guide to inspire all capital market players to embark on their journey into the ESG universe. This guide aims to educate them about the various reporting methods and their significance, the evolving landscape of Corporate Sustainability, and the specific areas that should be addressed in all reports. By familiarizing ourselves with these important aspects, all institutions can enhance transparency and make notable progress in ESG endeavors.

Providing transparency into ESG practices is no longer an option, but a necessity for large companies to remain competitive and relevant in today’s business landscape. By moving beyond compliance and focusing on ESG risk management and performance improvement, companies can unlock significant value for all their stakeholders, and ensure long-term success. We believe that integrating ESG considerations into our practices and activities, will enable URC to further strengthen our customer’s experience, offer us resilience to the everchanging marketplace conditions and position us toward driving and impacting the ESG development agenda.

Inflation-proofing investments has emerged as one of the top priorities for CEOs to achieve organizational growth in the next 1–3 years. What are your views?

Real estate is a tangible asset, it has a physical presence and value. Such assets provide investors with a sense of security and stability. Thus, as a leading real estate developer, our priorities continue to be creating value for our shareholders, building sustainable communities, and delivering high-quality projects and products.

In the real estate world, inflation can act as an appreciation hedge for property values. As the general price level rises, real estate value may also increase. This is because properties are tangible assets, and their prices may rise to keep pace with inflation. In this sense, real estate can be seen as a store of value.

However, the relationship between inflation and property values is not always straightforward. Factors such as the COVID-19 pandemic, Russia’s conflict with Ukraine, and the resulting disruptions have made it likely that inflation will be higher.

One potential impact of inflation on property values is that it can lead to an increase in real estate prices. When the general price level rises, the cost of building materials, labor, and land acquisition tends to go up as well. This can result in higher construction costs for new properties, which can indirectly impact the value of existing properties. Additionally, if inflation is accompanied by economic growth and increased demand for real estate, property values may rise further.

Generally, the real estate sector is often considered flexible and has historically shown resilience. This is mainly due to its ability to adapt to changing market conditions and demand, along with its capacity to withstand and recover from various economic downturns or crises.

Local demographic factors such as population growth and age distribution can also impact how inflation impacts property value within a specific area or country. Changes in demographics can drive demand for different types of properties, influence property prices, and affect rental markets. For instance, an aging population may lead to increased demand for retirement communities or assisted living facilities. Similarly, population growth in urban areas can drive demand for residential and commercial properties. 

In terms of Kuwait, population has a relatively young age structure, with a significant proportion of the population being under the age of 30. Kuwait has experienced rapid population growth and has a high fertility rate, contributing to a relatively young population overall.

Going a step further, demographic data helps us select the most suitable locations for real estate development. By analyzing factors such as population growth, income levels, employment opportunities, and lifestyle preferences, we can identify areas with high growth potential and demand.

Kuwait is often interested in pursuing projects that can contribute to the enhancement of its economy. This thirst for projects stems from the desire to stimulate economic growth and attract investments. 

Looking ahead, I am optimistic about the Kuwaiti market as it actively seeks to create new business sectors within the economy. The country’s mission to diversify the economy recognizes the value of projects and properties and, consequently, has instituted schemes to provide support to encourage the growth of the real estate sector.

Furthermore, through these laws, the government also aims to encourage the private sector to contribute and take part in the growth. 

We will constantly seek new investment opportunities that increase our value before our shareholders and investors, and enhance the country’s economy.

Our results indicate that organic growth (growth through R&D and Innovation) is among the top strategic pillars for achieving organizational growth. What are your thoughts? How do you imbibe the culture of innovation at URC?

Growth through R&D and innovation is essential for fostering economic progress, driving competitiveness, and addressing societal needs. It involves investing in research, translating knowledge into practical applications, and fostering a culture of creativity and problem-solving. By leveraging innovation, organizations and countries can achieve sustained growth, create new opportunities, and tackle complex challenges. 

Innovation in the real estate sector, often involves leveraging technology to improve operations, enhance user experiences, and streamline processes. This can include the adoption of digital platforms and tools for property management, online property listings, virtual property tours, smart home systems, energy-efficient solutions, or the use of artificial intelligence and data analytics for market analysis and decision-making.

A solid example of adapting advanced technologies in our projects, is Hessah Towers and Byout Hessah, the residential components within ‘Hessah District’, where all units feature a full array of automated amenities for an elevated connected living experience. Residents of Hessah Towers and Byout Hessah will enjoy a fully automated home via a cutting-edge smart home technology, bringing convenience, comfort, security, autonomy, and enjoyment to their own modern lifestyles. Additionally, the residential district’s use of Fiber to the Home (FTTH) technology makes its buildings the smartest IOT-enabled buildings in the State of Kuwait.

We have also recently announced the development and implementation of a single digital platform that serves as a centralized tool for managing various aspects of tenant operations within our properties. This online platform aims to enhance convenience, communication, and efficiency for both tenants and the company. 

Innovation in the real estate sector also focuses on sustainability and environmental considerations. This includes the development and integration of green building practices. Moreover, innovations in sustainable real estate aim to create healthier and more efficient living and working spaces.

It’s a district designed to keep you on your feet, active, and full of life; a design that supports sustainable living and that takes better care of the natural environment.

By embracing innovation, we are improving operational efficiency, enhancing sustainability, offering oneof-a-kind projects and unique customer experiences, and adapting to changing market dynamics. It enables us to explore new opportunities, create value, and stay competitive in an evolving landscape.

80% of the CEOs surveyed agree that achieving gender equality in the C-suite will help them meet their growth ambitions. What are your views? How critical is gender equality for your organization?

Gender equality is not only a fundamental human right, but a necessary foundation for a peaceful, prosperous and sustainable world. By promoting gender equality, companies can help build a positive image to attract a larger pool of talent.

Nowadays, job seekers believe that a diverse workforce is an important factor when evaluating companies and job offers. In order for any company or business to succeed, they have to take into consideration the mindset of the youth and marginalized groups, especially women.

We believe that businesses that actively support diversity and equality overall tend to make more inclusive business decisions and, ultimately, achieve more growth as people from different genders tend to approach the same thing with a different mindset. While ensuring more women’s participation in the workforce and especially leadership, companies are attracting a diversified set of talent, skills and strengths which will help in collaborating and working more effectively. It will also lead to a more creative environment for co-workers, which will help in problem-solving and lead to new innovations that will improve business performance.

At URC, we are committed to equality, fairness, and respect. Diversity and equality sit at the heart of the many initiatives we have in place across the company as we recognize the benefits that empowering women brings to every business. As a Vice Chairman & Group Chief Executive Officer of URC, I continually see how gender diverse teams achieve better results.

At the end of 2022, women comprised 38% of professional employees and 32% of URC’s total workforce, up from 25% in 2019. Today, women sit at the very top of our management team with two female board members, 24% of managerial positions, and more than 40% of our new hires. I am proud to work for an organization that is agile and more gender-balanced.

URC partnered with the United Nations (UN) to promote Women’s Empowerment Principles (WEPs) which aims to promote the adoption of real and sustainable policies on various topics related to recruitment, retention and leadership and complements the vision of URC to promote diverse and equal work environment.

This comes in line with the support and guidance of Sheikha Bibi Nasser Sabah Al-Ahmad Al-Sabah, URC’s Chairperson, to promote inclusion, youth empowerment and inspiring work environment for all women.