The real estate and property development industry is believed to have been slow in its embrace of digital technology, but with the quickening pace of innovation and the increasing sophistication of investors and tenants, tech experts say the industry is ready to welcome change and innovation. As a matter of fact, the last few years have seen the emergence of PropTech, a term used to distinguish the technologies, which aim to disrupt traditional business models.
In the broad sense, PropTech relates to a number of computing platforms, software and applications being explored and used by companies involved with all aspects of CRE (Commercial Real Estate). In recent years however, technology has made its powerful presence felt through the sector, and the use of digital platforms and data accelerated at such a rapid pace that those who do not fully embrace and understand its reach are left floundering at the start. Many major developers have joined the race to invest in PropTech technology, believing that it will provide them with a competitive advantage. The transition from two-dimensional documentation using software like AutoCAD to 3-D building information modelling (BIM) is a classic example. Next-generation geographic information systems (GIS) can now illuminate the site selection process helping companies and investors find the best locations for workforce productivity, innovation and corporate social responsibility. Organizations are full of dark data with disparate information spread across geographies and service lines. New technology now allows us to pull all this together and analyze it using powerful tools to generate new insights.
Mohammed Araiqat, General Manager of Arab Architects, the firm behind the design of many of Bahrain’s iconic buildings, should know. “PropTech basically aims to enhance business through technology, so for us as consultants, PropTech, makes our lives easier with municipality approvals. Although in some aspects, undoubtedly, human contact cannot be replaced, technology makes it way simpler. In other aspects, the software that we use on a daily basis are getting more advanced (such as Revit, BIM, 3Ds Studio max), and that helps us in delivering better results to present. Developers are hence, able to get a clearer picture of the projects presented in animations and virtual reality 3D images.”
THE INTERNET OF EVERYTHING
One technology for the industry that has presented itself on the landscape with an impact beyond compare is IoT (The Internet of Things), the interconnection via the Internet of computing devices embedded in everyday objects. A 2014 Goldman Sachs study, “The Internet of Things: Making Sense of the Next Mega-trend,” predicts that there will be 28 billion connected devices on the IoT by 2020. CRE companies can use environmental (temperature and air quality) and occupant movement, to make the necessary adjustments in space conditioning to monitor the environment and measure temperature, humidity, water pressure, power consumption and more. The report envisages a sensor for virtually everything in a building that an owner or occupier can anticipate and monitor in the foreseeable future.
The effects are already beginning to be felt in the growing field of Home and Office automation. Says Naser Shahrour, CEO of Al Safar Group, parent company of MECOS, a pioneer of home and commercial automation in the country, “MECOS is a system integrator engaged in providing highly advanced, state of the art automation systems and security solutions within the workplace and home. Home automation puts control of basic systems and appliances into the hands of the homeowner and provides access from a remote point – like a smartphone app, or at a centralized unit inside the home.”
The commercial real estate world is in fact undergoing a promising metamorphosis today as technology is assuming the role of a catalyst churning up more benefits for the sector. The new ‘real’ factor in the business is serving to capture and hold the attention of all those who are keen to find a property that is nothing less than their dream home, work, leisure or office space. For realtors and developers, showcasing the property under construction is not just a smart way for them to kick-start their business but it is also easy for them to monitor each and every step in the construction process.
Likewise for house-hunters, now more than ever before, starting the search for a new home begins online. As Mohamed Araiqat says, “More that 75% of investors search for available properties online. Property websites are spreading and turning to applications in our phones. I truly believe that the process of buying a property in Bahrain will significantly transform in the coming years.”
All well-known property portals today have a listing of properties that covers a gamut of requirements and budgets and a growing number of property agents are justifiably spending a greater share of their total marketing budget on the Internet.
“We need to constantly update and stay on top of every trend,” says Shada Judeh, Regional Manager of YourAmlak, popular B2B real estate portal that links the real estate industry by creating a platform for brokers, developers, and end users. “We are deeply committed in the ‘match-making process’ that links buyers and tenants to the brokers and developers.”
Earlier, one had to invest considerable time in steps such as exploring the proprieties physically, short listing based on the experience he or she gathered at the locations and then reaching the final decision of buying a property. However, now the new technologies i.e., virtual reality and augmented reality are paving way for much more time-efficient solutions and are revolutionising the real estate sector to a very large extent.
“We are basically a property management agency that provides all kind of solutions – a one-stop property solution that gives market research, valuations, sales, rental, real estate activation…everything under one umbrella, “ says Ali Al Shuwaikh, CEO and Founder of HomeSeekers, a consolidated property solution provider that services landlords, owners and tenants.
With just few clicks, these sites allow buyers to filter properties as per their preferred budget, unit type, locality etc., see 3D walkthroughs, read about pros and cons of localities, market trends, compare properties, show locality videos, property reviews, financing options, legal assistance, interior décor options and many more.
All these additional features have enhanced the property search experience and transformed online websites from being a mere classified site to the most popular online destinations for property needs. In November 2017 approximately 30,000 real estate consumers visited YourAmlak in search of their next home or investment opportunity; when these users interact with the website and its search engine they provide valuable insight as to what today’s real estate consumers are looking for.
From mobile devices to software as a service (SaaS) platforms for marketing, customer relationship management, and market research, cloud technology has become a ubiquitous part of commercial real estate. Professionals travelling around with a heavy briefcase filled with all their important documents are a thing of the past. Today contracts, client information, and other important data are all stored remotely and synced across platforms to be accessed through cloud servers by smartphones, tablets, and laptops.
A BRIEFING ON PROPTECH
CRE firms have benefitted strongly from their recent investments in widely available technology solutions helping to drive cost and operational efficiencies. The rapid emergence of new applications and solutions designed to address specific challenges have also opened up new revenue and market opportunities – often transforming traditional processes along the way.
The Internet of Things: The Internet now connects sensors and other computing devices embedded in everyday items, from home washing machines to commercial HVAC systems. Many of these devices can be programmed to send and/or receive data daily hourly or even continuously.
Big Data: The IoT is enabling the collection and storage of extremely large data sets, which can be collected and analyzed, both independently and in conjunction with other data sets, to reveal patterns, trends and associations.
Cloud Computing: Many companies and individuals now use a network of remote severs connected via the internet to store, manage and process data, rather than storing it all on their own local servers or personal computers.
Virtual and Augmented Reality: Computer-generated 3-D simulations and 3-D videos enable people to virtually “tour” properties remotely and even “visit” and “feel” projects still in the early stages of design or construction, using equipment such as 3-D cameras, goggles and gloves.
Artificial Intelligence and Machine Learning: Computer systems can now perform many tasks that in the past would have required intervention from a human programmer. Some can learn to make adjustments to changing circumstances, based on experience, without being explicitly programmed to do so.
Blockchain: This public digital ledger is similar to a relational database that stores transaction records in a series of chronologically connected “blocks.” This process creates verified transactions with a clear timeline that cannot be pulled apart.
FORWARD THINKING POLICIES
Regarded as one the fastest growing economies in the Middle East, the government of Bahrain, is consistent in its efforts to achieve the goals set by the Economic Vision 2030, of His Majesty King Hamad bin Isa Al Khalifa. It provides clear direction and guidelines for the development of society with a key focus to provide modern and affordable housing across Bahrain.
Bridging the gap between supply and demand has been one of the government’s challenges. As a result of the efforts, over 6000 homes were allocated in 2016 across Bahrain, followed by 4,200 housing units allocated at various locations in the Kingdom in 2017 under the direction of His Royal Highness Prince Salman bin Hamad Al Khalifa, the Crown Prince, Deputy Supreme Commander and First Deputy Prime Minister.
Bahrain’s property market witnessed stability across all its sectors in 2017 and the trend continues into 2018. Representing one of the biggest non-oil GDP contributors, in general, activity in the sector has been characterized by continuity. According to data collected by the Survey and Land Registration Bureau, the aggregate value of real estate trading during the first seven months of 2017 was BHD613.6mn, and it was observed that local buyers have decisively dominated the market in 2017. The large number of properties under construction and in the pipeline supports the confidence in the sector.
A well-regulated banking sector has led to more investments, attracted by the projected returns potential that real estate in Bahrain holds when compared to other investment areas. An improvement in industrial and infrastructural development likewise has a trickledown effect on the property sector.
Project activity is also expected to gain with the new Real Estate Organisational Law, approved by the Parliament in June 2017, whereby all new projects in the country will have to pay a capital contribution of BHD12 per square metre toward infrastructure development. The law further sets prison sentences for those guilty of irregular property deals and has set up a new Real Estate Regulatory Authority (RERA) to license real estate agents, resolve disputes, monitor deals, oversee the progress of projects, and various other matters. These measures promises to ensure the industry stays a regulated and significant contributor to Bahrain’s GDP.