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News & opinion

30 OCT 2018

Real estate and the Fourth Industrial Revolution in the Middle East

Rapid urbanisation, climate change and resource scarcity, are the main factors heavily impacting cities and built places. New business models and practices will reform professions through the emergence of technologies disrupting and reshaping the industry.

The built environment – which touches every person, nation and business – is on the brink of change. It is currently facing a global technological revolution, known as the Fourth Industrial Revolution, that merges the physical, digital and biological technologies to deliver products and services in new and emerging sectors.

At this year’s Cityscape Conference in Dubai, RICS Global CEO Sean Tompkins discussed the inevitability of the change brought by the Fourth Industrial Revolution.

“This Fourth Industrial Revolution isn’t one which we can see. We can’t point to new steam-powered trains, cars or computers. Instead, it’s all about applying technologies such as artificial intelligence, big data computing and the Internet of Things to the physical and biological world – creating cyber-physical systems which augment human intelligence and experience. This new approach to technology is already changing how we create and run our cities, with big opportunities for people living in cities,” said Tompkins

With better public health and trade, there has been a rise in population which in turn has driven the new industrial revolution. This increase in population has led the way to investments, with 50% of all real estate transaction now being international.

Cityscape Conference, Dubai

Sean Tompkins, CEO RICS,  discussed the inevitability of the changes being brought by the Fourth Industrial Revolution.

These improvements are more pronounced in cities. During his presentation, Sean stated that 50 of the world’s biggest urban areas contain 7% of the world’s people and 40% of its output. “However, the increased longevity of life and willingness to stay in cities, is making urban places a lot busier. As such, Dubai’s population is now set to double by 2027,” he added.

Regional strategies  

To achieve environmental, emotional and economic objectives, digitising the design and management of the city and its structures needs to be accomplished. With this in mind, the Government of UAE launched the UAE Strategy for the Fourth Industrial Revolution in September 2017, and it aims to increase the UAE’s contribution to the national economy through the advancement of innovation and future technologies.

This strategy looks at the multiple aspects that need to be addressed for the country to be prepared for this industrial change, not only to become a leading global hub but also an open lab for the Fourth Industrial Revolution’s applications.

Building cities for the future

Optimisation and utilisation of data in the planning of future smarter intelligent cities, that improves environmental sustainability and enhance human lifestyle, is one of the important factors of this strategy.

Across the region, innovative public-private partnerships are powering the future of smart cities, from Dubai to NEOM in the Kingdom of Saudi Arabia. At this year’s GITEX Technology Week held in Dubai, it was announced that the Middle East is boosting the global Smart Cities market growth, which is expected to almost triple to $1.2 trillion by 2022.

Connected smarter buildings that are part of smart cities can help reduce energy use by triggering preventative maintenance and decreasing operating costs. Real estate practitioners are expected to continue adopting and investing in technologies that give consumers more options, a clearer picture and integrated data that help in buying and selling decisions.

New payment methods through Blockchain and Artificial Intelligence to help process data and offer advance notice on real estate related patterns affect the market and are being used and encouraged in the UAE. In 2016, the Dubai government launched the Dubai Blockchain Strategy that aims to make Dubai the first government in the world to apply all transactions through thus network by 2020.

“While still in its infancy, blockchain technologies could help in increasing the liquidity of real estate assets. For instance, the transaction history of a piece of real estate could be recorded on a distributed ledger, verified by others in the network as a legitimate transaction, and converted into a securitized token to be traded at a market-set price – similar to crypto-currencies like Bitcoin and Ether. Benefits of this ‘tokenisation’ process include increased liquidity and transparency, enhanced security and simplified management,”said Tompkins

As urbanisation continues to draw more people into cities, the real estate industry needs to embrace smart city solutions and shape its evolution.

This Fourth Industrial Revolution isn’t one which we can see. It’s all about applying technologies to the physical and biological world.

Sean Tompkins