The UAE’s real estate sector is hot; Proptech market is hotter
Once an industry that was relatively lagging in adopting digital solutions and tools, the global real estate sector is now investing heavily in upgrading capabilities, with the help of emerging technologies. Proptech – a hybrid term created by joining Property and Technology – boasts one of the most dynamic start-up ecosystems that is attracting huge amounts of venture capital worldwide.
Global Proptech deals amounted to a cumulative value of approximately 7.3 billion US dollars(1), in 2020. And this figure included a pandemic affected first half of the year, which resulted in the total being lower than the previous year!
Given the key role played by real estate in the UAE economy, the nation’s building and construction sector has also embraced Proptech, with characteristic enthusiasm. Tech-enabled solutions and digital tools are already impacting the entire lifecycle of buildings in the UAE, from the design stage, to construction, and operations and maintenance. And, with the relationship between Proptech, enhanced efficiencies, and greater profitability becoming increasingly obvious, the future looks bright for the continued expansion of such solutions, in diverse applications related to the industry.
Industry-wide applications are accelerating the adoption of technology in UAE real estate
One of the crucial reasons for the emergence of such a vibrant Proptech sector in the UAE is the virtually endless innovations it is enabling, across the entire spectrum of real estate functions.
Brokerages are leveraging data to unlock profitability and sales, by empowering the real estate sales force with instant insights and information, as well as tools that enhance customer engagement. Likewise, the construction and building management verticals are benefiting from data-led decision making, and real-time IoT, AI and Machine Learning derived insights, which allow the agile and scalable control of spaces, equipment, and multiple building systems, from a single-pane-of-glass view.
The UAE’s first Proptech Community was launched in February 2020(2), just as the Covid-19 pandemic was redefining what was expected of the industry. During the peak of the crisis, the difference in the capabilities of early adopters, and those commercial real estate operations that were yet to deploy Proptech solutions, was stark. With the reopening of the economy, in the new normal, technology has taken its rightful place, front and center in the UAE real estate sector.
Proptech success stories are making headlines, adding momentum to adoption
No matter how desirable an innovation, its successful implementation as a business model is what eventually drives widespread adoption. Looked at Proptech from this perspective, the definitive growth it is enabling, is one of the most compelling arguments in its favour. One such success story, which has recently made the headlines, is that of Dubai-based brokerage firm Huspy(3), which has launched a web and app-based licensed mortgage platform that offers homebuyers financing solutions, without paperwork. In a mere 8 months since its launch, Huspy has already become of the UAE’s largest brokerages, growing at more than 40% every month, and attracting in excess of $200 million in annualized GMV.
Such dramatic growth trajectories underscore how receptive the UAE real estate sector is to the new and enhanced solutions, delivered by Proptech. Given the significant youth demographic within the UAE, and their appetite for tech-enabled solutions, it’s safe to assume that Proptech empowered business models will continue to flourish, and redefine the nation’s real estate sector.