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Proptech companies set to drive UAE real estate market

Dubai real estate will continue strong upward trend this year, further increasing demand for proptech companies in the emirate

Proptech companies are gaining grounds and will drive growth in the UAE real estate due to strong start-up ecosystem, government support and high demand for SMART solutions in one of the most promising markets of the world, says a report.

The Zoom Property Insights data disclosed that proptech start-ups across the UAE have raised more than $100 million in funding during the past five years while $16 million was invested in proptech companies in the emirate during the pandemic, enabling it to grab a prominent spot in the list of most attractive countries for proptech investment.

The Insight data further noted that Dubai real estate will continue strong upward trend this year, further increasing demand for proptech companies in the emirate.

“The real estate market in the UAE is growing rapidly, with new developments being built all the time. This creates a huge opportunity for proptech companies to provide innovative solutions to meet the needs of investors, sellers, and end-users,” said Ata Shobeiry, CEO of Zoom Property.

Ata, who believes that the prospects for proptech companies in the UAE are very promising, said the recent statistics indicate that proptech companies in the region are growing in number, attracting significant investment, and gaining traction among real estate professionals and consumer.

A positive outlook

Experts, executives and leading industry players see bright prospects for proptech sector as real estate companies have become more and more data-driven in their approach, using data gathered from artificial intelligence and other tools to make investment and operating decisions.

The UAE is home to more than 55 per cent of over 200 proptech start-ups in the Mena region, according to the Zoom Property Insights.

It is expected that these numbers will continue to grow at a rapid pace as more companies are setting foot in the region, leveraging the ever-growing real estate market of the emirate.

"The UAE is a pioneering nation committed to supporting innovation, and proptech is no exception. I am sure we will see many more proptech companies succeeding this year and in those to come," said Amira Sajwani, founder and CEO of Prypto.

Referring to Future Market Insights, she said global proptech market is expected to increase at a compound annual growth rate of 17 per cent from $18.2 billion in 2022 to $86.5 billion by 2032.

"Dubai’s real estate market is set to grow by 46 per cent in some areas this year, further increasing demand for this innovative sector here in the UAE," said Amira Sajwani, who is also managing director of Damac Properties.

"Successful smart cities such as Dubai will thrive when they meet the needs of their residents. Proptech can fulfil these requirements by allowing for remote viewings which fit around busy working lives and by making information available as and when a client is in a position to access it," she said.

Why proptech flourish

Prashant Thakur, senior director and head of Research at Anaroc Group, said the global Covid-19 pandemic outbreak catalysed massive technological intervention across sectors and industries. He said the real estate sector rapidly transformed the way it operated, flagging off a digital journey which laid open the immense scope of technological intervention and implementation.

"Today, PropTech has become a boon to every kind of real estate sector stakeholder from landlords to tenants and investors to brokers. Technological disruptions using various platforms and technologies have far-reaching impacts," he said.

According to Forbes, 95 per cent of buyers engage on online platforms at the discovery stage of their home-buying journey, and 51 per cent buy property online.

Currently, proptech is available in 64 countries worldwide, with around 8,000 proptech companies globally, according to PropTech Global Trends 2020. The US holds the lion’s share of proptech companies accounting for 59.7 per cent worldwide, while continental Europe accounts for 27.2 per cent. Asian proptech real estate industry accounts only for 3.5 per cent and is largely dominated by China.

“The government support for digital transformation is likely to be the main catalyst to promote proptech companies in the country,” says an analyst.

Attributing credit to the national programme to train 100,000 coders and set up 1,000 digital companies in a span of five years with an aim to increase startup investment from Dh1.5 billion to Dh4 billion, he said proptech companies are bound to lead the lead the real estate sector in the years to come.

Challenges ahead

While the future of proptech companies in the UAE is bright, there are also some challenges that they may face.

The increased competition in the market and the costs involved pose the biggest challenges. However, navigating through the legal landscape as the real estate industry is highly regulated may prove to be a roadblock as well. But, with the right strategy and execution, proptech companies can achieve significant success in the region.

“Despite these challenges, there’s a lot of scope for proptech companies to succeed in the region. The residents of the UAE are tech-savvy and always looking for innovative solutions to make their lives easier,” Shobeiry said.

“Proptech companies that can offer smart solutions, which simplify buying, selling, and renting of properties, are likely to remain high in demand, paving the way for the success of these start-ups," he said.

Key takeaways

• Proptech start-ups have raised more than $100 million in funding in the UAE during the past 5 years

• About $16 million investment made in proptech companies during the

• The UAE is home to more than 55 per cent of over 200 proptech start-ups in the MENA region, and the number is expected to increase further

• Currently, proptech is available in 64 countries worldwide, with around 8,000 proptech companies globally

• The US holds the lion’s share of proptech companies accounting for 59.7 per cent worldwide, while continental Europe accounts for 27.2 per cent.

• Asian proptech real estate industry accounts only for 3.5 per cent and is largely dominated by China.

— muzaffarrizvi@khaleejtimes.com