The Foundations of Growth: Proptech in Saudi Arabia
The development and economic action plan of the Kingdom of Saudi Arabia (KSA) is truly remarkable. The planned economic development of the Kingdom, across every facet of society, via the Vision 2030 initiative will materially change how people live, consume and work within the Kingdom.
The adoption of the world’s leading technologies across the full asset lifecycle and every sector of the built environment, underpins much of the delivery of the giga-projects. From the mobility and accessibility of NEOM, to the further amplification of a vibrant tourism industry via projects like the Red Sea projects, Saudi Arabia will be a global leader, in demonstrating how tech can enrich how we use space.
Global Proptech: Reshaping how we live, consume and work
Within the last decade the rate of real estate innovation has grown rapidly, as the utilization of real estate has shifted. Below are some of the current trends and some facts on the current Proptech market.
Saudi Arabia: A burgeoning economy
The Kingdom of Saudi Arabia (KSA) has seen huge transformation in the last 20-30 years and continues to evolve and develop materially across most indicators. It has a youthful population, and its use of technology is already part of day-to-day life. Technology will play a pivotal role in the next phase of Saudi Arabia's growth.
The Vision: Impact of Vision 2030 on real estate
The 3 pillars are the bedrock of Vision 2030 (V2030) – the growth roadmap for how Saudi Arabia will deliver economic, cultural, and social prosperity.
Delivery of Vision 2030 will be in part attained via the completion of the 13 “giga-projects” – a series of real estate centric projects with an estimated value of at least US$900 billion.
The Rise of Saudi Proptech: Specialism in transaction facilitation
Digitizing transactions, principally through marketplaces and portals, is where the majority of Proptech offerings in Saudi Arabia operate. Although, the recent rise in investments has seen a greater breadth and depth of offerings across multiple sectors.
Proptech is Key to Vision 2030: Hybrid domestic + global model
Whilst much of the global real estate industry are having to convert sub-optimal spaces and older stock, the Kingdom have an in-built advantage of factoring this into current construction and design in the ambitious projects in train.
Whilst currently a net importer of the world’s leading technologies, local Proptechs have an unparalleled opportunity to grow in tandem with the KSA’s transformation of real estate. With opportunity across every sector, lifecycle and use case – the incentive for local entrepreneurs is clear.
Yet given the journey to develop such advanced technologies, not all Proptech will be locally sourced. We, at The PTC, see a hybrid of the leading domestic and global Proptechs being the optimal model – with Proptech partnerships being a key stepping stone towards this steady state.
These factors and the significant investment available, makes the future of Saudi Arabian Proptech look very bright.
Stephen Macdonald is Managing Partner and APAC lead at The Proptech Connection