In July, Dubai recorded more than $1 billion worth of real estate transactions in a single day. With the industry requiring heavy investments, the pressure to deliver fast returns is constant and the need to experiment with new business models can’t be overlooked.
This pressure can create a precarious comfort zone that inhibits real estate leaders’ longer-term perspective, and puts their ability to keep up with global innovations and best practices at risk. While some organisations are willing to make big bets on technology with the goal of staying at the forefront of innovation, others downplay its relevance against the unchanging fundamentals of real estate.
Impact of proptech
The key to any effective technology adoption is the ability to discern its true value. One example of proptech that has been well-received in the industry is Building Information Modelling (BIM), which enables users to see an accurate rendering of the final product before development begins.
Developers in Abu Dhabi have also seen tangible benefits from implementing robotic process automation (RPA) to speed up tasks like financial reporting, and in the rollout of big data initiatives to collect and consolidate customer behavior data to inform decision making.
Developers are investing across the spectrum of proptech, with similar emphasis on making the most of data to enhance operations and the customer experience. According to a CEO of an Abu Dhabi developer, the focus is on building efficiency in sustainability, sales, finance and asset management. He sees proptech having a ‘huge impact from an investment, asset and property management perspective’ by helping to yield insights, promote transparency, and support sustainable building design.
On AI, the CEO of one of the UAE’s largest developers says it is ‘working to understand how best to integrate [AI] into the existing business’ before investing. AI has potential from a service standpoint – such as being able to predict whether a tenant plans to leave a property; and direct the leasing or customer services teams to respond accordingly.
Senior leaders in the industry are mainly focused on ensuring people are able to understand and operate these innovative technologies. However, when pursuing technological expertise, too many companies are overlooking the skills that most senior leaders need to change mindset and guide their companies toward becoming ‘tech enabled’.
Our research on company performance has identified an elite set of organizations (among the world’s largest 500 companies by market cap) that consistently outperformed others in terms of their compound annual average growth rate (CAGR) based on organic revenue.
What differentiated these ‘super accelerators’ was their ability to mobilize, execute and transform with agility – what we call META. At its core, META enables companies to adapt and pivot faster than competitors which is key in today’s digital era.
Already we see some transformative leaders in the industry understanding that experimentation is key to stay ahead of the game. Some prominent UAE developers are trialling use of the metaverse and, while they cannot be sure that this will provide a tangible return, they believe that lessons learnt from trying it out will be sufficient.
Another part of META is the linking of innovation to a higher purpose with societal impact. For example, the adoption of sustainable building which is becoming increasingly prevalent in the industry. Investment companies like Equitativa are placing increased focus on ESG to attract international capital.
Apart from meeting expectations of customers and attracting international talent, investing in creating a societal impact can also help a company retain talent. Additional research we conducted found that 73 per cent of employees who say they work at a purpose-driven company feel engaged, compared with just 23 per cent of those who do not.
The technology available today gives UAE developers a prime opportunity to become more efficient, diversify their offering and, for early adopters, to forge ahead of the competition. Returns are unlikely to be immediate, but making — or indeed failing to make — confident bets now could have major implications for the future.