By Gavin Gibbon
Disruptive tech is changing Dubai's real estate market. Thierry Delvaux, CEO of JLL MEA, reveals why this is important news for investors
The real estate sector has traditionally been a late adopter when it comes to new technologies. This situation is now changing quickly, with PropTech rapidly emerging as one of the hottest buzzwords in the industry.
Like many catchphrases, there is no clear definition for PropTech, with the term being used relatively loosely to refer to the application of new technology-based solutions within the property sector. While there is room for debate around the definitional issues, there is little doubt that new technologies are disrupting all aspects of the traditional real estate model, changing the way that real estate is delivered, funded, managed, and maintained.
The UAE’s exponential efforts to deploy PropTech have been recognisable in recent years through initiatives implemented by multiple governmental and regulatory entities, such as UAE smart government, Smart Dubai, and Dubai Land Department (DLD) and its Real Estate Regulatory Agency. These entities are offering technological services, such as the investment map portal, providing investors with practical information on ongoing real estate investment projects and a trust account system app, managing the registration of property developers and their projects.
In design and construction, the most prominent use of PropTech is in 3D printing.
Under Dubai’s 3D Printing Strategy, every new building in the emirate is expected to be 25% 3D-printed by 2025. In line with this, Dubai recently unveiled the world’s largest 3D printed buildings in Al Warsan, coming three years since the opening of a futuristic 3D-printed office in the Dubai International Financial Centre (DIFC).
With this technology more commonly implemented, the time and cost of construction are expected to be reduced, in addition to the technology contributing efficient solutions to some of the construction challenges like the availability of labour.
Technology is not only creating new ways to deliver and construct buildings but has also made real estate more accessible to different investor tiers through crowdfunding. Simply put, this is the act of raising money from multiple investors through online platforms.
As such, Smart Crowd is one of the first crowdfunding platforms to be regulated by the Dubai Financial Services Authority (DFSA). The platform uses a screening tool and multiple data points to assess the investment attractiveness of real estate opportunities. Once 100% of the funds are raised for a specific project, a Special Purpose Vehicle (SPV) is created and the shares are allocated proportionally to your investment.
Online portals represent one of the earliest uses of digital technology within the real estate sector.
Listing platforms now make it possible for brokers to improve the quality of their listings and focus more on efficiently closing deals and providing better solutions to their potential clients. In Dubai, DLD offers an app (Dubai Brokers) for licensed and approved property brokers. Furthermore, through secure government channels, DLD has introduced the Smart Pay Service that made the producer payment process much easier.
Blockchain is another technology widely used in the transaction process that creates digital records for assets, verifies transactions, and maintains transparent and timely records of property transfers. This information is usually available to all third parties. One such tool is the Investment Map Portal, introduced by DLD that is actively improving transparency by making all transactions streamlined and visible to the involved parties; thus helping investors make more informed and data-driven decisions.
Multiple platforms and applications are also now available to allow building owners and managers access to a vast array of historical data and trends. These include an increasing range of platforms specialising in asset management and the reduction of operating costs through the use of sensors and the Internet of Things (IoT) to analyse occupancies and people’s movements as well as reduce environmental impacts by making buildings more energy-efficient. One example is the new headquarters for Dubai Electricity and Water Authority (DEWA), located in Al Jadaf which, upon completion, will be one of the world’s largest and most energy-efficient government buildings.
With all these changes happening around us at a fast pace, it’s high time for the real estate sector to move away from its traditional siloed position to embrace a more technology- and data-driven future. PropTech is here to stay and we can certainly expect it to increasingly disrupt the way the real estate industry is structured and operates in the years ahead.