Real estate assets once available in a legacy application are now in the blockchain environment, said Khalifa Al Suwaidi, CEO and board member, Emirates Real Estate Solutions. He was speaking on the impact of blockchain technology on Dubai's real estate sector at the Cityscape Global Conference on Monday.
"We launched the Dubai Blockchain Strategy in 2017 that aims to convert all title deeds in the Dubai Land Department registry into a blockchain environment. It's a platform meant to integrate all real estate services," Al Suwaidi said.
Earlier, property transactions took at least a week or 20 days to be concluded. Today, one can do so in 30 minutes. Blockchain provides services by different real estate stakeholders on a single platform, thereby improving the journey for end-users.
"People need to be made aware of the changes in rules and regulations. Contracts approved digitally must also be upheld in a court of law. Having a legacy system along with blockchain will help protect data and owner rights. People will adapt to blockchain once it starts resolving their problems," the senior executive said.
Talking of how blockchain brings ease and convenience to end-users, Dobo Radichkov, senior director of data and blockchain at Dubizzle, said: "The aim is to convert paper-heavy processes in transacting real estate online. With blockchain, you can buy/sell real estate very quickly."
However, with security standards still evolving, one needs to balance the power of blockchain technology with its maturity. "A lot of authorities mirror the digital side of things with paper documents: this is a hybrid approach. However, there is a potential risk to business. Both the government and private sector need to work together for blockchain to succeed," Radichkov added.
Panelists discussed how the benefits of using blockchain would outweigh the risks in the real estate sector.
"The big guys will start using it if they believe there is regulatory and information security. Trading of digital real estate assets is complex. When you transact a digital token with a regulatory service in the background, this will drive confidence in the market," explained Cassian Scott, senior vice-president, Altus Group.
Meanwhile, outlining the top trends disrupting the UAE real estate sector, Ian Albert, regional director and head of research and advisory, Mena at Colliers International, cited Artificial Intelligence, flexible workspaces and regulation changes.
"While the use of chatbots in Mena is 20 per cent in 2018, it is estimated to rise to 57 per cent by 2021. Co-working and flexspaces are also a top trend. Dubal flexspaces account for less than one per cent of the total office market today. But, there has been 94 per cent growth between 2014 and 2018," he pointed out.
Attracting digital occupiers
Dubai is changing its response towards attracting digital companies and digital economy in four ways. "These include: 1) Repositioning its free zones. The government has already announced a number of dual licences. You can get offshore benefits in an onshore location. 2) Continue growth towards Dubai South, Expo site and Al Maktoum Airport 3) Bringing growth back towards the city [Downtown] through projects such as Dubai Creek Harbour, MBR City, Dubai Hills, etc. 4) Regeneration of existing industrial areas such as Al Quoz and Umm Ramool," Craig Plumb, head of research, JLL Mena, told Khaleej Times.
Dubai's economic growth has been built on creating clusters of similar businesses in a range of free trade zones, with the existing 26 free zones accounting for more than 30 per cent of the emirate's economy. This traditional model is now being refined, which will result in changes to the future pattern of clusters of economic activity across the city.
Meanwhile, Dubai is on its journey to becoming an innovation-led 'New World City'. "Dubai will continue to offer a blend of attractions for tech-savvy local and international companies. The creation of a range of new physical environments will play a key part in the city's transition to an innovation-led New World City," according to Jeremy Kelly, head of JLL's global research.
Dubai scores well on all the counts to become a digital city: number of startups, unicorns and patents applied. Dubai can be classified as a hybrid city with rapid progress in infrastructure and real estate.