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In Conversation With Manika Dhama: Pioneering real estate trends in Saudi Arabia through data analytics and sustainability

Article-In Conversation With Manika Dhama: Pioneering real estate trends in Saudi Arabia through data analytics and sustainability

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In this interview, Manika Dhama, Director of Real Estate, Deloitte provides a glimpse into the future of real estate in Saudi Arabia, discussing data analytics, sustainability, risk management, and consulting careers in the industry.

MARKET OVERVIEW

Q. Given the ambitious goals set by the 'Vision 2030' initiative, how have you observed the transformation of the Saudi Arabian real estate market over the past few years?

There has been a significant transformation in the Saudi Arabian real estate market over the last few years. This includes development of mixed-use schemes in Riyadh, Jeddah and DMA targeted at residents, in addition to giga projects in the pipeline, including NEOM, ROSHN, Red Sea, Diriyah Gate, Qiddiya, among others, which are also focusing on international visitors and investors. According to data from MEED Projects, Saudi Arabia has just under USD 54 billion worth of contract awards, making it larger than those in the five other GCC states combined. 

Q. Can you elaborate on the key factors that are currently driving demand in the Saudi Arabian residential, commercial, and industrial real estate markets?

Demand dynamics vary by city and asset category. Residential sector demand in Riyadh, Jeddah and DMA is driven by Saudi nationals. While villas remain the preferred housing typology in the capital city, in Jeddah there is increasing demand for upper-mid to high end residential units, with good quality apartment schemes continuing to sell well during the pre-construction phase.

Demand for Grade A office stock in Riyadh has remained strong, underpinned by the government’s focus on developing the city as a regional hub for international companies. Meanwhile Jeddah and DMA Grade A stock primarily caters to government offices and public sector entities.

Enhanced visa norms and ease of travel has supported the hospitality sector’s post-pandemic recovery. Tourism development is one of the key pillars of Vision 2030 which is being driven forward by the Ministry of Tourism, the Saudi Tourism Authority and the Tourism Development Fund who are focussed on delivering best in class tourism and entertainment concepts across the Kingdom.

In the industrial sector, demand continues to be dominated by the freight forwarding segment with an emerging shift towards the logistics and e-commerce sector.  To date the market has lacked high quality logistics and facilities to fulfil last mile delivery demands.

Q. Considering the recent reforms in Saudi Arabia, how do you see the real estate market evolving in the Kingdom in terms of urban planning, architectural trends, and demand for different types of properties?

New development projects in Saudi Arabia are embracing global best practice when it comes to planning and architectural trends. Modular construction, application of digital twins during the detailed design and construction phase, as well as customer engagement through VR and AR tours are examples of some trends in the real estate market in Saudi Arabia. Development planning is evolving to meet changing consumer needs.

Q. What is your assessment of the balance between supply and demand in Saudi Arabia's key real estate segments, and how do you envision this impacting the market's performance in the near future?

Supply and demand factors will play out differently within mixed-use or standalone schemes in the key cities, versus the Giga Projects that are in the pipeline. City projects are primarily targeted towards Saudi nationals and there is a gap in key segments such as affordable housing and Grade A offices in Riyadh. For the Giga Projects that are also targeting international visitors and investors, their unique positioning and pricing strategy needs to be clearly defined across the various real estate products. There are currently strong levels of pent up market demand for good quality mixed use product, however given the number of projects in the pipeline, managing the phasing of these projects will be key to ensuring value accretion over the medium to long term.  

TECHNOLOGY AND INNOVATION IN REAL ESTATE CONSULTANCY

Q. How is technology transforming the way your consultancy operates?

The use of technology has become essential in improving efficiencies within our operations. We apply a suite of tools across the project lifecycle, from internal project management tools to kickstart an engagement to tools for governing how data is collected, managed and analysed for ease of decision making.

Q. What role does data analysis and predictive modelling play in your consultancy's strategy development?

Data analytics and forecasting is a key element of how we advise clients on their real estate portfolios. We have used machine learning based forecasting tool to assess correlation of multiple factors including population, GDP, income profiles on real estate sector trends like residential prices, office occupancies, tourism indicators, among others. We have also run case studies to test the impact of specific factors in the market For instance in our latest Middle East Predictions report Deloitte partnered with Perigon AI to analyse home relocation trends within KSA in response to the workplace location. This showed the migration patterns from other cities into Riyadh and a preference for North Riyadh in particular as a home location.

Q. How are you incorporating PropTech solutions in your service offerings?

Big data and AI is changing how investment decisions are undertaken in the Kingdom. Deploying digital assets ensures a single source of truth and has helped us to coordinate real estate sector and asset level data to find the optimal balance of uses for a site in a shorter period of time. For instance, to allow stress testing of financial returns and to provide bankable business cases, Deloitte, using Delve software by Google, has developed The Living Masterplan approach. This integrated approach allows us to transform development recommendations into the project’s digital footprint using the power of AI to generate hundreds of options for a site based on priority outcomes and financial metrics. What could take months can now be reduced to a matter of days.

Q. Could you talk about a digital innovation your firm has recently implemented to enhance client services?

We deployed Deloitte’s machine learning tool Intuition to understand current and future supply-demand dynamics and underlying macroeconomic factors for a local planning authority. This integration of AI with real estate and financial planning linked socio-economic factors with demand for real estate assets over time, allowing the client to test the impact of key factors on the real estate market indicators, such as residential prices or hotel ADRs.

Q. How does your firm approach new technology trends like AI, blockchain, and IoT in the context of real estate consultancy?

New technology trends are at the heart of the Deloitte Middle East practice. We will continue to deploy the latest tools in providing real estate development advice to clients, leveraging our Middle East AI institute, which was launched in Riyadh in May of this year. The institute has a focus on generative AI and machine learning, making it the first-of-its-kind platform in the region.

SUSTAINABILITY AND REAL ESTATE CONSULTANCY

Q. How is your consultancy addressing the growing demand for sustainability in the real estate sector?

As the real estate sector in the region matures, it has become critical to plan for sustainable operations from the outset. Our Real Estate Development team works in collaboration with in-house Environmental Social Governance (ESG) specialists covering aspects of ESG strategy, implementation, risk analysis, governance, reporting and assurance. We plan to expand this suite of services under our Development and Asset Management umbrella for developers and asset owners in the region.

Q. What services does your firm offer to help clients meet energy efficiency and green building regulations?

Green building regulations are yet to become mandatory in the region. However, developers and real estate owners have begun considering sustainability metrics in their planning and operations. The focus is often weighted heavily towards the “E” is ESG. However, for the built environment to be truly sustainable, the elements of social impact and governance are equally important and require consideration in real estate projects.

Together with our in-house ESG specialists as well as through the use of tools such as The Living Masterplan, Deloitte is helping clients evaluate opportunities to unlock spare capacity in the built environment. Retrofitting sustainable infrastructure in an existing community or masterplan can be challenging; therefore the ability to identify land or built assets that can quickly be repurposed to support multiple viable uses is critical in this assessment.

UNDERSTANDING THE ROLE AND PERSONAL GROWTH

Q. Could you provide an overview of your role as the Director of Real Estate at Deloitte in Saudi Arabia?

I lead the mega projects and public sector Eeal Estate Development team in the Middle East. We assist clients with the provision of market due diligence, financial feasibility, highest and best use analysis, portfolio strategies for developed and undeveloped assets, implementation plans and investment strategies for built real estate assets, strategic health check reviews and Business Planning for large-scale projects.

Q. What have been some pivotal moments in your journey to becoming a Director of Real Estate?

My decision to specialise in the Real Estate Development services for large scale projects and local government has been transformative for my career. Having the opportunity to lead unique development projects and market research initiatives in the region has allowed me to engage with peers and industry leaders who bring with them regional and global expertise. The real estate market in the Middle East is unique in terms of consumer preferences, demographics and socio-economic factors that impact how the market operates. In this environment, being able to analyse and advise on complex greenfield projects as well as develop sector strategies for local government entities has been a professionally rewarding experience.

Q. How do you keep your knowledge and skills updated in the rapidly evolving real estate sector?

I read real estate industry reports and articles during the week. Deloitte also provides multiple training opportunities throughout the year for continued professional development, which includes sector-focused as well as leadership related workshops and seminars. As a Member of the Royal Institute of Chartered Surveyors (MRICS) there are also regular courses and materials available on global and regional real estate industry trends. I also enjoying reading books on economics, management and real estate sector history.

Q. What personal traits or skills do you believe have been key to your success in this role?

Staying open to learning new things, managing time effectively, seeking guidance where needed and having open dialogues with peers and clients on performance feedback has helped me in my career.

STRATEGIC VISION AND FUTURE TRENDS

Q. What future trends in the Saudi Arabian real estate market excite you most?

The Saudi Arabian real estate market is a fast paced environment and I am most excited about the opportunities to use digital tools for analysing data and enhancing the development planning advice we offer to clients, particularly to local government entities that are undergoing digital transformation. Another area of interest is working with mega projects on their funding readiness and delivery strategy by understanding the underlying real estate market assumptions and demand dynamics.

Q. How are you preparing your team to adapt to these emerging trends?

Regular training opportunities help the team adapt to the dynamic real estate market in which we operate. From offering courses in excel-based financial assessment to learning how to use new data analytics tools, our focus is on developing the skills needed by the team to progress in their roles as well as being able to provide valuable advice to clients. Deloitte also runs internship and graduate programs, including professional opportunities for Saudi and UAE nationals, to work within different Financial Advisory teams to gain a broader exposure to professional services.  

Q. Could you share some insights on how you see the role of real estate consultancy evolving in the next decade?

The role of Financial Advisory teams will continue to be that of trusted advisors who have the knowledge and expertise in providing specialist inputs to help clients solve complex business problems. Real estate professionals in the region need to form a long term base for supporting the region's development goals and be agile to adapt to a dynamic economic environment. One size does not fit all and therefore businesses will always appreciate tailored advice that combines global best practice and technical knowledge while acknowledging the uniqueness of the local market context.

Q. What lessons from your journey do you think would be most valuable for individuals looking to build a successful career in real estate in Saudi Arabia?

Learning never ends and in a dynamic real estate market like Saudi Arabia it is particularly important to remain actively engaged with sector knowledge. Participating in the industry as a thought leader can help individuals gain and provide valuable market insights.

Also, real estate professional services is a people-first profession. The key lesson is taking the time to listen and understand a client’s challenges within the context of their position within the industry as developers, local government, institutional investors, lenders and owners.

CHALLENGES & OPPORTUNITIES

Q. How do you handle risk and uncertainty in your role, particularly in a volatile market like real estate?

Quality and risk processes are standard operating procedure while working within the real estate practice of a firm like Deloitte. From conflict and independence checks at project initiation stage to risk mitigation plans that include confidentiality, data management and quality assurance reviews of financial analysis during project delivery, the volatility can be controlled. No industry is risk-free and therefore we rely on process controls to manage risk and uncertainty to the extent possible.

Q. In your opinion, what are the key challenges and opportunities for those seeking a successful career in the Saudi Arabian real estate sector?

The greatest challenge is also the biggest opportunity in the Saudi Arabian real estate market. The rapid transformation in the wider economy means that individuals seeking a successful career in real estate must be agile and willing to adapt to this pace of change. This requires arming yourself with the right technical knowledge and tools to respond quickly to market changes and opportunities. Also, spending the time to understand the local market context, which varies for different real estate asset types in different locations, is key.

Q. What final piece of advice would you give to anyone aspiring to a leadership position in real estate consultancy?

Professional services is a challenging and rewarding environment in equal parts, which requires a suite of skills to be successful. My top three are: (1) Be a (very) good listener to clients, peers and market trends. (2) Build a motivated team who are excited,  challenged and supported to work on unique and complex projects. (3) Manage your time effectively to allow for productive work, family, exercise and rejuvenation. A successful career spanning decades is a marathon and you don’t want to run out of steam early.

 

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To delve deeper into the opportunities available for consultants in Saudi Arabia, we offer a dedicated report titled "Career Spotlight: Real Estate Consultants Discuss Opportunities in Saudi Arabia." This comprehensive report provides valuable insights and discussions from real estate consultants, shedding light on the potential for career growth and success in the Saudi market.

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