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The GCC Proptech Summit 2019, organised by the Bahrain Economic Development Board (EDB) and HexGn, attracted industry experts from around the world, for a day-long event focused on PropTech, the highlight of which was the release of the Global PropTech Time Survey (GPTS) 2019.
The report, which surveyed 400 real estate professionals around the world, aims to provide insight into how the industry is currently engaging with technology solutions as well as the future outlook on the intersection between property and technology.
Ahmed Alammadi, CEO of Diyar Al Muharraq, one of the sponsors of the summit and GPTS, said: “We wanted to be part of this prestigious event which was a great platform for leading experts, officials and decision makers from the real estate and technology sector to meet and the report is an important foundation for start-ups to evaluate their value propositions and real estate players to head towards digital transformation.”
The GPTS 2019 highlights that the industry is in various stages of digital transformation, ranking different segments in the industry based on their current and potential collaboration with PropTech players. It finds that the Asset Management is the most technology adoption-ready segment while owners and fund managers are the least adoption-ready.
However, almost all the segments, Asset Management, consultants, construction, brokers, developers, investors and fund managers, have allocated 30 to 55 per cent of their technology budgets to using new PropTech solutions.
Each segment has its own challenges. The survey suggests that the construction segment sees capital investment as the most significant challenge yet also recognises the cost-saving potential of many new construction technology solutions.
Thirty eight per cent of the players perceive PropTech to be in its infancy stage, while 34 per cent consider it ready to boom. Interestingly, a majority of the real estate professionals surveyed want PropTech start-ups to work with them and other existing companies to develop mutually beneficial solutions. This may be in response to the wave of technology disruption that has uprooted existing players in multiple industries, like media, transportation and communication.
It may also be indicative of an interest in developing tailored solutions that fit into a company’s existing business model, instead of upending the entire market’s economic system. However, technologies like block chain within the real estate sector are set to do so anyways, as many escrow-based intermediaries whose main function is to establish and maintain trust will find their business model eroding.
This also presents an opportunity for these players to branch out into newer technologies, which according to the GPTS, will present stakeholders with unparalleled transparency and reduce transaction costs significantly.
Investment and lending, especially on a micro-level but huge scale has seen unprecedented growth in Asia and Africa, helping families and small businesses become upwardly socially mobile.
Start-ups in Bahrain have numerous markets and valuable problems to solve, according to the report and attendees at the summit. Furthermore, players like the EDB have provided resources and the platform for these businesses to grow and test their business models in an island-sized testing laboratory before scaling internationally.
Ali Murtaza, the Director of Real Estate and Tourism at Bahrain EDB, commented: “Bahrain has time and again proved to be fertile for businesses especially for the tech-driven industries and is doing the same for proptech. The Bahraini ecosystem can help proptech players grow at an unmatched rate, as it has no dearth of any of the start-up-essential resources.”
Even though the technology adoption by the real estate industry lags behind tech development significantly, the appetite for more tech infusion in the industry is increasing in response to the benefits and disruption the industry has experienced globally.
“Bahrain’s ecosystem and business landscape has an edge over the other hubs in the region as per the findings by HexGn,” said Jappreet Sethi, CEO of HexGn. “The investment and revenue flow in the proptech segment can be expected to see an impressive growth in the coming years. The GCC PropTech Time Summit 2019 has further propelled this growth.”
