Innovation: the key to Dubai’s real estate future
The roadmap of UAE Vision 2021 was formulated keeping innovation at the forefront. Hence, the bid to transition into a diversified, knowledge-based economy has propelled the UAE’s national initiatives, in the past decade. At the same time, technology has penetrated every nook and corner, integrating global economies and establishing a new world order. No sector is impervious to technological disruption and economists acknowledge a distinct value proposition, in innovation-driven businesses. Therefore, when a data platform like Unissu releases the findings of a survey, which show that global funding to the tune of $14.85 billion has been poured into Proptech in 2018(1), not many eyebrows are raised.
Although Dubai has matured into a broad spectrum of economic sectors, real estate continues to play a significant role in the Emirate’s economic development. Home to world’s first functional 3D-printed office building and tallest skyscraper, Dubai’s reputation in innovative real estate development is second to none. It is already among the most coveted cities for real estate investments of all magnitudes. Yet, instead of basking in the glory of past achievements, the Dubai government is poised to incorporate sustainable technologies and innovations to take the city’s real estate revolution to new heights.
According to Sudhakar Rao, the Chairman of Gemini Property Developers, the information age has made innovation a prerequisite for businesses to garner investments and confidence, regardless of the sector. Attesting to Sudhakar Rao’s belief is JLL’s recent ‘Innovation Geographies’ report, which finds a robust connection between innovation, real estate performance and capital flows(2). Taking Dubai’s economy into account, where real estate has accounted for one-fourth of GDP growth in 2018, JLL’s findings are of particular significance. “Innovation certainly is the need of the hour” Sudhakar Rao observes, “and Dubai already has a head start”.
By facilitating room for innovation and providing capital access to innovators, Dubai can leverage real estate opportunities to the benefit of its overall economy. Investors are known to harbour a strong inclination towards innovation-driven markets, across geographical and cultural lines. Considering Dubai has innovation embedded deeply in its national agenda and core belief, its technological potential can be harnessed with relative ease compared to many other economies. With an inherently positive outlook towards change, supportive regulatory bodies, pre existing brand value, sizeable MNC presence, built-in entrepreneurial disposition and general awareness, Dubai has wide scope for innovation in real estate.
The term Proptech is an overarching descriptor that refers to the integration of IT into conventional real estate activities, such as property search, buying, selling, renting and managing. Technologies such as virtual reality (VR) and augmented reality (AR) are enabling virtual tours of properties, as well assisting designers in their efforts. Likewise, the adoption of Blockchain and 3D-printing technologies is another instance in which Proptech is gaining traction in the region. In keeping with the rise of sharing economies and crowdfunding in the global real estate landscape, Dubai is witnessing growth in services like Airbnb, which registered 63% year-on-year growth, as of January 2019(3). Access to Big Data and the advent of Internet of Things (IoT) have been nothing shy of a revelation in real estate, paving the way for colossal capital infusion into corresponding R&D.
Sudhakar Rao believes that the response to the possibilities enabled by digital transformation has been very enthusiastic, in the Dubai real estate sector. “In recent years, change and dynamism have been ever-present across all disciplines in the sector. Going forward, innovation and Proptech will play an integral role in safeguarding Dubai’s reputation as a premier global real estate destination with properties that feature state-of-the-art amenities” Sudhakar Rao explains.
Innovation in Dubai
JLL’s research, which encompassed factors like FDI, ability to attract venture capital, R&D budget, patent applications and talent concentration, noted Dubai as an ’emerging innovator’. On the back of a strong performance in the aforementioned areas, the Emirati city is being tipped to become a global leader in Proptech led innovation, in the near future. The sector is warming up to digitizing processes, sharing workspaces, intuitive ergonomics, new platforms to connect and sustainable practices, at a healthy rate.
In December 2018, the Deputy Ruler of Dubai, Sheikh Hamdan bin Rashid Al Maktoum, launched the Mohammed Bin Rashid Innovation Fund Accelerator (MBRIFA) to support and promote innovative talents hoping to bring their ideas to life(4). The Dubai Land Department (DLD) is also at the helm of the Proptech revolution in the Emirates. Under the patronage of the DLD, several Proptech summits have been hosted in the UAE, where innovators and industry stalwarts come under one roof and exchange ideas about the best practices and challenges in Proptech.
According to Sudhakar Rao, governmental backing is the X-factor behind the acknowledgement, cognizance and application of innovative technologies in Dubai real estate. “Dubai did not have an airport until 1966, but fast forward fifty years, Dubai is planning to build the first city on Mars as a part of the 2117 Mars project. Perhaps, that should make a strong case for innovation in Dubai,” Sudhakar Rao concludes.