Globally, the PropTech market is expected to continue its growth trajectory, with a projected compound annual growth rate (CAGR) of almost 17% by 20321. One of the main drivers of this growth is the increasing demand for affordable housing in urban areas. The concept of creating smart and sustainable cities has long been promoted in the Middle East as a way of quickly addressing the ongoing challenges of urban living and developing a city design that is both people-centric and sustainable. Some examples of this approach include Lusail City (Qatar)2 and The Line in Neom (KSA)3. According to the Smart City Index 2021, Abu Dhabi and Dubai are the smartest cities in the MENA region, ranking at 28th and 29th in the world, respectively. Efforts are being made to improve their rankings through the use of sustainable energy, smart architecture, and high-efficiency appliances in projects like Masdar City4.
The emergence of smart cities in the MENA region is creating opportunities for local PropTech companies to provide innovative solutions for urban living. This could include partnering with FinTech companies to offer financing solutions for real estate transactions, for example, or working alongside traditional real estate companies to provide them with digital solutions.
PropTech companies in the region are leveraging technology to provide innovative solutions across the customer lifecycle of property ownership, from financing to ongoing transactions and property management. The COVID-19 pandemic has helped accelerate the adoption of digital technologies in the PropTech market, with more people turning to online platforms for property transactions. Artificial Intelligence and Machine Learning are also being integrated into PropTech solutions, providing more accurate predictions and analysis of property trends.
Virtual and Augmented Reality technologies are being used to provide virtual property tours and enhance the overall customer experience. Other trends include the use of 3D printing or drones to innovate the process of real estate construction. Moreover, Real Estate crowdfunding platforms are gaining popularity in the MENA region, offering a wide variety of investors the opportunity to invest in projects with low minimum investments, which diversifies the risk of Real Estate projects.
Stryber conducted an analysis of VC funding volumes in PropTech-related industry categories with the aim of identifying growth signals. The results revealed that VC funding has been increasing across all categories - investing, building, managing, and living - compared to previous years. In 2022, more than $100 million USD was invested in innovative solutions for building property, such as sustainable/green buildings, architecture, and construction. Additionally, more than $200 million USD was allocated to startups focused on property management solutions, such as facility maintenance or vacation rental. The emergence of startups in these industry segments has been accelerated by the rise of technologies like the Internet of Things applied in PropTech, favourable government initiatives towards energy efficiency, and a resurgent construction sector.
Dubai is one of the leading PropTech hubs in the region. Companies such as "Bayut" and "Property Finder" have been founded there to help customers with renting, buying, or selling properties. Platforms like "Stella Stays" offer flexible terms of stay, ranging from one night to over a year, at furnished rental units in the UAE, KSA, Bahrain, and other MENA countries. They also provide a community-driven living experience through co-working spaces, rooftops, or lounges, as well as a dedicated app that digitizes the whole experience, from booking and check-in to controlling smart home systems and ordering a wide range of guest services. Solutions like these are in high demand, especially since the UAE has issued a dedicated remote working visa to promote it as an ideal destination for living, working, and investing5.
