If there is one region where proptech can be expected to flourish, it will have to be Middle East and North Africa (MENA). Coming out of the pandemic, experts already anticipated that tech innovations and solutions will revolutionize the sector, especially in key markets such as Saudi Arabia and the Egypt.
True enough, some $128 million worth of funding has been funneled into the industry in the MENA region beginning 2021, according to a report by MAGNiTT. This investment activity only serves to highlight that the MENA region is ripe for new innovations and further investments in proptech.
GROWTH DRIVERS FOR PROPTECH
The bright prospects for proptech in the MENA region reflects the growth trajectory in the global market, which is expected to grow in value to $87 billion by 2032, up from $67 billion in 2021, based on estimates by Future Market Insights.
While the growth of the real estate industry in general is the primary driving force for the expansion of the proptech market in the region, there are other factors that are influencing this development. One, the region is home to a young and tech-savvy population that has a strong appetite for innovative and tech-driven solutions.
In addition, there are many areas across MENA that are undertaking massive real estate and development projects, making the region an ideal market for proptech innovations to emerge.
Saudi Arabia, for instance, has several projects under construction, such as at NEOM and the Red Sea, which are incorporating AI applications and Internet of Things (IoT) technologies in creating smart cities and buildings.
SAUDI ARABIA SEEKING PROPTECH
Abdulrahman Alkulaybi, CEO at Saudi-based PropertyNet, says that the Kingdom “is increasingly focusing on the development of sustainable and energy-efficient buildings as well as other proptech solutions that emphasize green construction, smart energy management, and eco-friendly building materials which offer both environmental benefits and cost savings for property owners and tenants.”
He sees exciting times ahead for the proptech industry in Saudi Arabia and encourages industry professionals to “stay ahead of the curve to seize opportunities for growth and innovation.”
TOP PROPTECH APPLICATIONS
Meanwhile, Dubai-based proptech start-up Realiste supports the growing consensus about bright prospects for the proptech industry’s growth in MENA.
In a recently published report, it highlighted numerous technologies that that will help shape the region’s real estate industry in the future, including virtual reality and augmented reality, the metaverse, self-service solutions and artificial intelligence (AI).
The report highlighted AI as the one that will have the most crucial contribution to the region’s economy, including the property sector, saying “Annual growth in the economic contribution of AI is expected to reach 20-34% per year across the MENA region by 2030, with the highest rates expected in the UAE and Saudi Arabia. These two countries alone will be accruing more than US$320bn combined. This possibility derives mainly from costs saved through automating processes and improving products and services across the region’s industries.”
PROPTECH ACROSS THE VALUE CHAIN
Some of the most visible and popular applications that people associate with proptech include Virtual Reality (VR) and Augmented Reality (AR) viewing or marketing of properties as well as real estate marketplace platforms, but proptech applications can be utilized across the entire real estate value chain, from design and architecture to construction and facility management, as well as many other verticals.
DAMAC ADOPTS PROPTECH
Sharing DAMAC’s experience with proptech, senior vice president Niall McLoughlin, says, “We have taken great strides in adopting new technologies and advancements into our project lifecycle, from the planning stage to customer management across our regional and global development portfolio.
“Be it through 3D modelling during our initial design phases, to home tours and virtual viewing experiences using technologies such as virtual reality and artificial intelligence, we have helped develop digitization strategies to enhance sales, reduce costs and improve overall performance.”
Beyond these applications, the real estate industry is also embracing other innovations, such as blockchain, tokenization and decentralization. Experts believe that proptech will develop in sophistication as advancements in technologies are made, but also in response to the changing needs of the market.
