Proptech companies are creating a strong footing in the UAE real estate due to strong start-up ecosystem, government support and high demand for smart solutions in one of the most promising markets of the world, according to a report.
Over the past five years, proptech start-ups have raised more than $100 million in funding in the UAE, according to the Zoom Property Insights.
The Insights data disclosed that $16 million was invested in proptech companies in the UAE during the pandemic, enabling it to grab a prominent spot in the list of most attractive countries for proptech investment. It further noted that Dubai real estate will continue strong upward trend this year, further increasing demand for proptech companies in the emirate.
Ata Shobeiry, CEO of a fast-emerging proptech company ‘Zoom Property’, believes that the prospects for proptech companies in the UAE are very promising.
UAE real estate market
“The real estate market in the UAE is growing rapidly, with new developments being built all the time. This creates a huge opportunity for proptech companies to provide innovative solutions to meet the needs of investors, sellers, and end-users. The recent statistics indicate that proptech companies in the region are growing in number, attracting significant investment, and gaining traction among real estate professionals and consumer,” he said.
The UAE is home to more than 55% of over 200 proptech start-ups in the MENA region, according to the Zoom Property Insights.
It is expected that these numbers will continue to grow at a rapid pace as more companies are setting foot in the region, leveraging the ever-growing real estate market of the emirate.
Referring to Future Market Insights, the Zoom Property data estimated up to 16.8% compound annual growth rate for global proptech industry to $86.5 billion by 2032 from $18.2 billion in 2022.
Challenges for proptech companies
While the future of proptech companies in the UAE is bright, there are also some challenges that they may face.
The increased competition in the market and the costs involved pose the biggest challenges. However, navigating through the legal landscape as the real estate industry is highly regulated may prove to be a roadblock as well. But, with the right strategy and execution, proptech companies can achieve significant success in the region.
“Despite these challenges, there’s a lot of scope for proptech companies to succeed in the region. The residents of the UAE are tech-savvy and always looking for innovative solutions to make their lives easier. Proptech firms that can offer smart solutions, which simplify buying, selling, and renting of properties, are likely to remain high in demand, paving the way for the success of these start-ups,” Shobeiry concluded.