Coupling technology with real estate, Proptech is becoming one of the driving forces of growth in Saudi Arabia and the Gulf region. The Saudi government’s visionary plans to develop smart cities, and reach a 70% rate of homeownership for Saudis in the Kingdom has singled out Proptech as a key sector for growth and development.
Saudi closed the year with two ground-breaking announcements in Saudi; the hosting of FIFA 2034 and the Riyadh Expo 2030. As the nation gears up for these two mega events, it is anticipated that proptech will be a key driver of growth and an enabler of facilitating the need for lifting the total supply of hotel rooms to 450,000 by 2030. The industry is set to optimize infrastructures, revolutionize urban planning, and redefine visitor experiences, all while ensuring efficient operations and advancing sustainability initiatives. Proptech solutions will transform and disrupt conventional facets of the real estate industry and urban living in the Kingdom, spanning from security monitoring to energy management and maintenance planning.
A key leader in this space is one of our expansion companies, Konn Technologies, a real estate customization service for developers that allows homebuyers to customize their homes off-plan by streamlining the design and pricing process. As co-founder and CEO, Basel Uraiqat explains, the company made a strategic decision to expand to Saudi Arabia and capitalize on the untapped opportunities owing to the surge of interest around Proptech.
Uraiqat points out that the key to a successful expansion journey to Saudi Arabia is a local expansion partner, “Especially in the beginning, you need some anchoring to understand the landscape of the country. And the team at AstroLabs helped us navigate through the process in an ever-evolving market.”
Drivers of Saudi Proptech: Urban Renewal and Innovation
The global Proptech market is expected to quadruple in the next decade as new information technologies and AI adoption increase in the real estate sector.
However global growth will likely be hampered by slow adaptation and a reluctance to shake off the traditional approach to real estate. Saudi Arabia, on the other hand, has taken the lead in providing opportunities for Proptech businesses, with real estate leaders pushing for the shift to realize the ambitious goals outlined in Saudi Vision 2030.
Saudi Vision 2030 aims to build 150,000 new residential units annually, with a projected population of 15-20 million in Riyadh. Other urban construction and renewal projects include the Kingdom’s billions worth of giga projects like NEOM, New Murabba, Jeddah Central, and King Abdullah Financial District.
Konn’s Uraiqat believes that while the industry is still in a learning phase in the region, and the word “proptech” is not as common as “e-commerce” or “fintech”, the growth is evident and rapid – “Our region [the Gulf], is adopting technologies at a fast rate. 5 years ago, if you would speak to someone about Proptech, they wouldn’t have been particularly aware of the industry. Fast forward to now, we are having summits in Riyadh and seeing more activations in Saudi, owing to the government’s support in pushing this industry forward.” Events like the Saudi Proptech Summit in Riyadh indicate a profound shift in perspective among government officials and real estate stakeholders regarding Proptech in Saudi, showcasing growth opportunities for foreign businesses in this nascent sector.
Real estate catalyzes economies and GDP growth, particularly noticeable in Saudi Arabia where housing is a pivotal aspect of the Vision 2030 goals. The pursuit of these objectives necessitates the incorporation of fresh technologies, along with the execution of strategic initiatives. The Saudi government is keenly cognizant of these demands, consequently rolling out fresh incentives to support enterprises operating within this sector.
As part of the efforts to meet these goals, the Saudi government has been implementing strategies to facilitate the expansion of regional and global companies into the Kingdom. Government-led initiatives like Wafi and Sakani are actively engaging with local and international companies, fostering an environment that encourages technological innovation and adoption.
Konn’s innovative offering has already impacted the frameworks of the real estate and housing industry, endowing real estate developers with a practical tool that simplifies and modernizes the operations of every party involved in the real estate transaction process.
Navigating the Saudi Proptech Terrain
Overall, Konn’s successful entry into the Saudi market in partnership with AstroLabs highlights how businesses can reap the benefits of a growing Proptech sector in the Kingdom by collaborating with experienced local partners who can navigate the intricacies of bureaucracy and adaptation.
Konn’s three-month expansion process was executed mostly remotely, with clarity, which Uraiqat considers valuable assets for an expanding business seeking new opportunities in a new ecosystem – “In less than 3 months, we had everything ready to expand to Saudi, including our company registration, iqama, and portals we needed to be registered on. The entire process was very smooth and mostly done remotely – I was only required to visit in the last 5 days”
He describes the Kingdom’s economy as intentional and focused, an attractive playing field for rising Proptech companies looking for exciting growth opportunities. With dedicated government support, specialized venture capitalists, and a market primed for technology, Uraiqat foresees plenty of opportunities for the Proptech space in Saudi Arabia.
The increasing demand for this industry opens the doors of the Kingdom to companies aiming to expand their business to Saudi Arabia, where they’ll find an evolving ecosystem ripe with opportunities.