By Farhad Azizi
Brand View: We witnessed the positive impact on the real estate sector that resulted from adopting blockchain technology and find ourselves at a new crossroad in technology adoption, writes Farhad Azizi, CEO of Azizi Developments
The commercial property segment forms a significant part of the Dubai real estate sector.
In fact, according to the Dubai Economic Report 2018, real estate accounted for 6.8% of the Emirate’s GDP, complementing the growth of the infrastructure sector that continues to witness robust investments with more than AED 23 billion - nearly 70% of the established AED 33 billion budget for Expo 2020 Dubai - allocated towards its projects.
Additionally, there has been a sustained growth in real estate sales and mortgages in the first 11 months of 2018, with the total value of transactions reaching over AED 194 billion, and local and international customers investing more than AED 62 billion.
The uptake recorded by the real estate and construction sector is further underpinned by the focus of our leadership to invest in smart infrastructure and drive the digital transformation of all sectors of the economy. We witnessed the positive impact on the real estate sector that resulted from adopting blockchain technology and find ourselves at a new crossroad in technology adoption.
The switch to ‘smart contracts’ will cover lease registrations — linking them to utility and telecom accounts — and property-related bills which adds to the ease of investing and managing property, effectively boosting investor confidence.
This topic is pertinent in the framework of Dubai’s development because for long, the real estate sector has been hesitant to change, resorting to reactive methods rather than proactive ones. It was the visionary foresight of HH Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of the UAE and Ruler of Dubai that enabled the Emirate’s real estate sector to take a quantum leap.
From housing blocks built by the government to stand-alone buildings rented out by landlords, our property landscape shifted to world-class standards, setting a regional model for development in the process with the introduction of the freehold era. Dubai is a classic model in how proactive infrastructure developments change the face of a city. Case in point is the dredging of the Dubai Creek to allow for the entry of bigger ships, which was a remarkable step that contributed to positioning Dubai as a trade hub.
The extraordinary expansion of the Dubai International Airport accelerated the positioning of Dubai as a global tourism and business hub, so did Al Maktoum International Airport, leading the city to rightfully clam its aviation hub status and take it to the next level.
The development of Jebel Ali Port and Jebel Ali Free Zone also positioned Dubai as the decisive global entry point to the wider markets across the Middle East and Africa. This all, in addition to the launching of Dubai Internet City, Dubai Media City, and Dubai Academic City among others that contributed, enabled this magnificent Emirate to not only diversify its economy, but to also attract vast numbers of international talents.
The second key point that needs to be emphasised is the need to realise new value from existing infrastructure assets. Though the turbulence of the automotive industry in the American city of Detroit, for example, put a strain on the city, today it is a model in urban regeneration, with initiatives such as the Strategic Neighborhood Fund, an initiative that brings together community developers and private, philanthropic, and public capital to help distressed neighbourhoods; and the creation of 20-minute neighbourhoods where residents are no more than a 20-minute walk or bike ride from all basic needs and services. The Detroit model was so impactful, JP Morgan applied it in France with a USD 30 million investment in Greater Paris.
Though Dubai is a nascent city — just over four decades — it is important to consider successful urban regeneration models to unlock the true potential of our existing infrastructure. Developing smart infrastructure is inherently tied to how we use big data and advanced analytics to gain customer insight. Digital transformation is the big opportunity for us, going far beyond the application of blockchain technology or artificial intelligence.
Big data offers a world of opportunities that we must unlock to gain predictive insights into customer behavior. These in turn enable us to create cities, not the way we imagine, but from the perspective of customers as our end-users. We must leverage the power of data to create an infrastructure framework that meets their aspirations. This is especially important for our region where young people are a demographic majority. Our young people are digital-savvy and know exactly what they want. Today’s connected generation seeks a smart lifestyle that we as developers and infrastructure planners strive to bring to the forefront to leave a positive mark on their lives through not just emotional intelligence but machine learning and algorithms as well.
How can we leverage AI for our industry? As early as 1955, Professor John McCarthy stated that the goal of AI is to “develop machines that behave as though they were intelligent.”
Let us apply this simple definition in everything we do and broaden our possibilities in the process. A report by McKinsey & Co. on artificial intelligence as the next frontier of construction technology points out that most infrastructure firms do not have the capabilities — including personnel, processes, and tools — to implement AI solutions. That is why one of the first priorities for us in building smarter infrastructure must be to invest in young talent.
At Azizi Developments, we are hiring and nurturing the next generation of talents because we know that they are best equipped to make our developmental framework relevant in the future. We put them at the forefront of our transformational journey.
Predictive modelling helps us gauge demand. AI processes help us determine our customer’s needs, and how these will develop in the future. By feeding machine algorithms past data, as well as several foreseeable factors that may have an impact, we can get a clearer image of how the market will develop in the future, and of how we can best serve its needs. But it is not just research departments that must apply this rapidly evolving technology – it is a company-wide effort through which business need to integrate it wherever it applies and drives progress.
It is my firm belief that smart infrastructure building is shaped by a number of critical factors:
Leveraging digital infrastructure to its fullest potential is the key to the future; it is what will differentiate the passive from the active; it is what will shape success.