(MENAFN - Khaleej Times) All real estate markets are driven by a combination of short-term cyclical factors and longer-term structural influences, and the UAE market is no exception. As we enter a new decade it's interesting to raise our perspective above the short-term market drivers and consider some of the longer-term structural factors that will influence the UAE real estate market over the next 10 years.
I believe that three mega trends will stand out from the crowd, data, sustainability and people. How individual developers, investors and occupiers react to these trends will go a long way to shape the real estate sector and determine which projects outperform the overall market.
It's been said that 'data is the oil that fuels the digital economy' and this is increasingly the case in the real estate sector that has traditionally been starved of good quality data. Over 50 per cent of respondents to JLL's latest global corporate real estate trends report suggested the lack of effective data and analytics inhibited their ability to accurately measure value and generate insights.
This situation is however rapidly improving, due to the digital transformation that we are now witnessing from the increased range of disruptive technologies that are being more widely applied across the real estate sector. With the Internet of Things (IOT) and other technological developments simultaneously driving down the cost and increasing the range of relevant data available, real estate owners, occupiers and investors are now able to make more informed, empirically based decisions, on the performance of their assets.
JLL have identified a progression from the traditional two-dimensional real estate data model to the current era of the 3 D 'Digital Twin' characterised by morXDS`Ce sophisticated digitalised records, sensor information and software integrations. This era is being fueled by the emergence of 'big data', that can perhaps best be regarded as the combining of data layers from a variety of non-real estate providers. These include data on mobile phone usage, taxi rides, credit card transactions, congestion data, movement racking, e commerce retail orders and an increasing range of location-based services.
Sustainability is emerging as one of the key global trends in 2020, with this topic occupying more column inches at the recent WEF gathering in Davos event than any other. Many of the different aspects to the sustainable agenda revolve around real estate. One critical element of this debate that has experienced a fundamental paradigm shift in recent years is that of energy consumption. The previous skepticism about the benefits of creating green and clean real estate assets is now being replaced by a realisation that there are real financial benefits of doing so. The proliferation of data and development of life cycle costing models has contributed to this change in attitude, as they have helped quantify the value of real financial savings that can be made from an investment in energy savings. The Dubai Integrated Energy Strategy aims to achieve a 30 per cent reduction in both energy and water usage across the built environment by 2030 and this will result in real financial savings benefits to both property owners and occupiers.
Real estate remains a people business with more developers and investors now recognising the value of the human factor. This is leading to a major increase in interest in wellness and other strategies to improve the quality of the built environment for residents, employees and visitors. Data and sustainability are combining to influence the growth of interest in the human component of real estate. There is a growing body of research showing how technical factors (air quality, light, temperature, etc) combine with softer factors (mind, consciousness, comfort) to influence how people feel and perform in any particular environment. This has resulted in engineers and social scientists working together to enhance the human experience in different forms of real estate, increasing productivity in offices, spending patterns in malls or the enjoyment of leisure facilities.
Thierry Delvaux is ceo, JLL MEA. Views expressed here are his own and do not reflect this newspaper's policy.
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