Artificial intelligence and technology can be a powerful factor in the development of the UAE real estate market

Developers are mulling over their options for investing in artificial intelligence, and you can't ignore that fact.

In July, Dubai recorded real estate transactions worth more than $1 billion in just one day. With the sector requiring large investments, the pressure to deliver quick returns is constant and the need to experiment with new business models cannot be ignored. These pressures can create an unsustainable comfort zone that hinders the long-term outlook of real estate leaders and puts their ability to follow global innovations and best practices at risk.

While some organizations are willing to bet big on technology in order to stay at the forefront of innovation, others downplay its importance compared to stable real estate fundamentals.

The impact of the proptech

The key to successful technology adoption is the ability to identify its true value. One example of a proptech that is well accepted in the industry is Building Information Modeling (BIM), which allows users to see an accurate depiction of the final product before development begins. Developers in Abu Dhabi are also seeing concrete benefits from implementing Robotic Process Automation (RPA) to speed up tasks such as financial reporting, as well as implementing projects to collect and consolidate customer behavioral data for decision making. Developers are investing in a variety of proptech solutions with a focus on using data to improve operations and customer experience.

According to the CEO of a developer in Abu Dhabi, the focus is on improving efficiency in sustainability, sales, finance and asset management. He believes that proptech has a "huge impact in terms of investment, asset management and real estate management," helping to generate new ideas, provide transparency and support sustainable building design.

In terms of artificial intelligence, the CEO of one of the UAE's largest developers says they are "working to understand how best to integrate [artificial intelligence] into existing businesses" before investing. Artificial intelligence has potential from a service perspective, such as the ability to predict whether a tenant is planning to leave a property and guide rental or customer service teams accordingly.

Talent activation

Industry leaders are largely focused on getting people to understand and work with these innovative technologies. However, in their pursuit of technological prowess, too many companies are overlooking the skills that senior executives must possess to change their mindset and set their companies on the path to "technology excellence." Our company research has shown that there is a set of companies (among the largest 500 companies by market capitalization) that have consistently outperformed others in terms of compound annual growth rate (CAGR) on an organic revenue basis.

Already we are seeing some cutting edge industry leaders realize that experimentation is the key to staying ahead of the curve. Some prominent UAE developers are testing the use of the meta-universe, and while they can't be sure of a specific outcome, they believe the lessons learned will be sufficient.

Another part of META is linking innovation to higher purpose and societal impact. For example, sustainable construction is increasingly being adopted by the industry. Investment companies like Equitativa are focusing more on ESG to attract international capital. In addition, beyond customer expectations and attracting international talent, investing in creating social impact can also help a company retain talent. Additional research we conducted found that 73 percent of employees who work at companies with purpose feel engaged, compared to 23 percent of those who don't.

Today's technology presents a great opportunity for UAE developers to become more efficient, expand their offerings and, for early adopters, get ahead of the competition. The comeback is unlikely to be immediate, but confident bets, made now or not, can have major implications for the future.