Insights from Investors and Family Office Roundtable at GCC PropTech Time 2019

The GCC PropTech Time 2019 summit was held in Bahrain on the 17 September 2019. It was organized by HexGn in partnership with the Bahrain Economic Development Board (EDB), the event was sponsored by the industry stalwart Diyar Al Muharraq as the platinum sponsor, and Oxfordcaps, a leading student housing startup based in Singapore and India, as the Gold Sponsor.

This signature proptech event brought together leading experts and decision makers from all sectors of real estate, along with startups and technology companies from 20 plus countries. The event had five roundtable discussion, each focussed on the specific influencers in the real estate lifecycle, in this article we are bringing insights from the Investors and Family Office Roundtable.

Investors and Family Office Roundtable

The Investors and Family Office Roundtable was moderated by Trey Goede (Saudi Aramco Entrepreneurship Ventures (Wa’ed), Saudi Arabia) and the panellists were Arnie Sriskandarajah (Managing Director, Round Hill Ventures, UK), Ali Al Majthoob (Associate Director, Middle East Venture Partners (MEVP), Bahrain), Ahmed Al Baharna (Managing Director, Al Baharna Holdings, Bahrain), and Nida Raza (Head of Capital Markets – MENA region, JLL, Dubai, UAE).

Trey kicked off the roundtable by initiating a conversation about the overview of the regional real estate industry and how it is evolving. Nida Raza took this forward by addressing the rise in investments across GCC and the extent of groundwork that needs to be laid in the coming years for proptech to grow. Saudi Arabia plays a catalytic role for this and for opening the world to the region, and is trying to open the market up and have announced several masterplan communities. They are looking at the neighbouring countries to learn from their achievements and challenges from the masterplan community perspective. “Tech will be the name of the game that will help with this”, said Nida about how the region is developing.

Digitization in Construction and Real Estate

The construction industry in Bahrain and the surrounding regions is an important pillar to the regional real estate industry, according to Ahmed Al Baharna. However, this segment is still seeing a lot of inefficiency despite being such a prominent segment. Developers want faster turnaround on their investment and technology can help here as well. the region is inefficient in the industry.  Technology in construction can help contractors manage onsite activities more efficiently and further help investors get a faster turnaround. The issue of high cost of implementation is the biggest reason why the regional industry has lagged in the area of technology adoption. This challenge and the rising demand for faster development need to be balanced for proptech to find a steady ground in the region.

Investment Mandate in the Region and Bahrain

According to Ali Al Mahthoob, most of the investment trends in the tech space were in areas other than real estate. However, the trends are changing in the last few years. Proptech in the region is growing fast as utility prices rise, paving way for a strong demand for smart and sustainable technologies in real estate. The industry and its tryst with technology is still in its nascency, making it an ideal time for proptech players to enter the regional market. The foundation for proptech to grow is getting stronger as other industries like fintech also grow.

He also added that the government needs to let the world know that the real estate sector is open for business. At the same time, investors and other real estate players need to voice their demand and need for more efficiency also needs to be addressed. Big real estate players also need to be more willing to invest and adopting tech than before for helping proptech thrive. Nida added in by emphasizing on the need for offering immersive and newer experiences within the traditional real estate system which can also pique interest into the industry.

Changing Mindsets in Real Estate

When asked about what is defining the proptech and real estate today, Ali believes that the urberization of real estate is what the current scenario is witnessing. Instead of waiting for clients to come to an affordable space. Spaces are now being transformed to offer flexible ownership options to create price disruption. Price challenges on the customer’s part are triggering landlords to come with new models to get the desired revenue.

According to Arnie Sriskandarajah, business models in real estate and proptech are changing. Founders are looking at alternative ways of running businesses with the help of technology. Data is becoming the first entry point for these companies into the proptech circle. In the last 2-3 years, the real estate industry has seen data being used for understanding how properties can be repurposed and for driving revenues.  Going ahead, proptech ecosystems can expect AI and ML taking over the roles of data analysts.

The panellists chimed in on the opinion that proptech will be a gamechanger for the regional real estate industry. As the region increases its dependency on real estate for the economy, proptech can help in truly uplifting the regional real estate industry and open new streams of investments into the countries

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