Metaverse, tokenization to revolutionize real estate sector: Dar Global CEO

While the global paradigm shift to digital is evident, UAE and the region in their quest for economic diversification have set their pace for digitalization on overdrive on the back of concerted government efforts to bring in strategic digital investments, propagate rapid Artificial Intelligence (AI) adoption, foray into the Metaverse, to name a few, and, needless to say, the real estate sector is reaping the benefit of it.

“As the virtual and real worlds continue to converge, today, the concept of space has changed forever. With people turning to technology or the internet for every light bulb moment, digitalization in real estate has evolved from being a crucial business tool to being the business. Technology has come to infiltrate every aspect of the built environment, renovating, and innovating it for the future,” according to Ziad El Chaar, Chief Executive Officer of Dar Global.

Dar Global is the international real estate arm of Dar Al Arkan, a 28-year-old real estate development company operating across the entire industry’s value chain with innovation and technology at its core.

The company is fast-growing its portfolio across the world with developments in the UAE, Qatar, Oman, Bosnia, the United Kingdom (UK), and Spain.

From planning and design to property management, technology and digitalization have found commonplace in the development lifecycle catering to the rising needs for better efficiencies, cost reduction, transparency, and enhanced decision-making, further helping organizations deliver customer experiences and satisfaction with improved agility than before.

“Whether it is virtual reality tours, increased adoption of 3D printing technology, AI becoming a common fixture across the development and management cycle, or Web 3.0 redefining how we co-develop and co-design our built and virtual spaces, there has been a transformative shift in how we manage, develop, and sell properties today, making every real estate contender rethink their strategy playbook and rightly so,” said El Chaar.

Looking at Web 3.0, there is no denying the fact that the Metaverse has come to be the buzzword of the current times. “With the sector likely to increase its contribution to Dubai’s economy to $4 billion by 2030 and users constantly gravitating to the virtual universe for a variety of experiences and social interactions, it possesses endless possibilities for real estate players to explore beyond the realms of the two-dimensional world,” he said.

According to El Chaar, “3D printing is another ground-breaking technology that meets our need for affordable, efficient, and sustainable results in real estate. Companies today are investing in this rapidly evolving technology for a variety of reasons, ranging from selling new plans and products to clients and investors to more efficient manufacturing and construction. But more importantly, for its sustainability benefits.

“With its attributes rooted in the usage of fewer materials, generating less waste, decreasing transportation needs, and potentially using natural or recycled materials, printed buildings are increasingly being viewed as a possible solution to weather the climate crisis. Thus, governments like the UAE, have come to champion the accelerated implementation of 3D printing as it is destined to cement the future of construction.”

Regarding investments, the Dar Global CEO said, “security tokenization has the potential to shake up this aspect of realty. A one-of-a-kind invention that will aid the UAE real estate market in maintaining its allure and glamour as it prepares to assume the guise of a digital economy. With blockchain becoming the operational term in the convergence of technology and real estate, applying it creatively to real estate investing can help the sector scale new heights.”

To tokenize an asset is essentially to divide it into shares, or tokens, which represent a clearly defined share of the asset in consideration. This is what we call a security token.

The tokens are secured through the immutability of blockchain technology, and every token transaction is completed with automated smart contracts (software algorithms integrated into a blockchain with trigger actions based on pre-defined parameters).

“Unlike utility tokens like Bitcoin, real estate security tokens have many advantages,” said El Chaar. “For instance, it represents ownership in underlying assets while allowing real estate owners and investors to offer smaller investment tickets, expanding distribution to a broader group, make online purchases accessible from anywhere, on a 24-hour basis. It can also help individuals build diversified portfolios with limited funds, and owing to the high level of automation, help in the reduction of insurance, administrative, and distribution costs. Tokenization also does not require a middleman, making it easier, cheaper, and more transparent.”

“Although future-proofed, the real estate industry has always been restricted to high-ticket investments and is illiquid, complicated, and opaque. Serving as an intersection between real estate and the digital economy, tokenization has the potential to resolve these problems,” he said.

Looking forward, the future of real estate in the region has never seemed brighter. “While today we continue to perceive technology and digitalization as a trend in real estate, there will come a time when it becomes more of a mindset or norm deeply embedded in the industry culture and processes,” said El Chaar.