Enhanced Technology Adoption is key to Bahrain Real Estate’s post-covid recovery
The ongoing COVID-19 pandemic has weighed heavily on investment into the real estate sector globally, and Bahrain is no exception. Moreover, Bahrain’s property market has felt the additional pressure of oil price volatility throughout the year. International Real Estate firm, Savills anticipates that the market will remain “subdued” for the next 12 months as outlined in their recently released ‘Bahrain Property Market’ report.
Nevertheless, the longer-term trends are still evolving. One pandemic “silver lining” seen across all sectors, from financial services to transport & logistics, has been its catalytic effect on digitalisation. For real estate, which as a traditional industry has been slower to adopt technology than others, this is an exciting development. Indeed, many key regional industry figures are taking an increasingly optimistic view despite a devastating property landscape. For example, in mature markets like Europe online retailing has a much larger market penetration than the region, creating regional opportunities.
Ian Albert, Middle East and North Africa CEO at global real estate company Colliers International argues that across the region, COVID-19 has further accelerated a digital shift in commercial real estate that was already being driven by rapid growth in cloud computing. In line with global trends, the pandemic has seen a regional e-commerce surge, which has resulted in the growth of fulfilment centres and Airbnb-style warehouse platforms looking to maximise under-utilised space for both storage and transportation. In other words, according to Mr Albert, real estate demand is still there, but it is changing.
Few players are better placed to drive and take advantage of this burgeoning Middle East “PropTech” industry than Bahrain. Even before the pandemic came into full force, the Kingdom lay the necessary groundwork to create opportunities for technology companies and traditional real estate companies to converge. The end of 2019 saw Bahrain host the inaugural GCC PropTech Time Summit, for example – bringing together key figures from both the traditional real estate and PropTech sectors for a symposium on technology adoption in real estate.
Early entrants to the Bahrain PropTech market include Estater, which offers an intuitive platform for listing, sharing, finding or managing a property. As well as Eglooz, which provides an open platform for landlords, property management companies and tenants alike, covering online payments, e-maintenance and real-time rent book management. PropTech companies such as these served as an invaluable survival tool for property managers during lockdown and quarantine, allowing them to continue managing properties from home. Further, they are key examples of how real estate can adapt and even thrive during times of crisis through digitalisation.
Moreover, as part of ambitious economic diversification efforts, Bahrain has partnered with several global tech giants to build some of the world’s most advanced soft and hard infrastructure. The Kingdom is home, for example, to the first AWS Middle East ‘Region’ and hyper-scale data centre. The implications for the fast-emerging B2C cloud-driven segment identified by Mr Albert are clear. Also, like most of the GCC, Bahrain boasts some of the world’s highest smartphone and internet penetration rates, not to mention a pioneering, flexible, yet stable regulatory landscape for data.
Finally, owing to its geographic location at the Middle East’s nexus and unparalleled regional market access, the Kingdom was already earning a reputation as the region’s leading distribution and fulfilment centre hub before the pandemic came into force. During the pandemic, in line with Mr Albert’s analysis, technology took a front seat. In April, Bahrain’s MVC Global – providers of one of the leading supply chain track-and-trace platforms for pharmaceuticals and medical devices – announced a strategic partnership with Cox Logistics Group – a Bahrain-based Logistics provider – to launch a first-of-its-kind “SmartHub” logistics warehouse for pharmaceuticals and food to be headquartered in Bahrain and serve the GCC market.
When global supply chains were decimated, this next-generation logistics warehouse employed emerging technologies to ensure the speedy and efficient distribution of much-needed foods and medicines across the entire region, drastically reducing the time required for paperwork, administration and bureaucracy. It was hailed as the first ‘smart hub’ in the Middle East to integrate a track and trace system on a blockchain platform with smart contracts for customs clearances and fee payments.
Law firm Trowers & Hamlins notes that in real estate, typically the residential market is the forerunner in adopting technology, as was the case in Bahrain, as evidenced by apps like Estater and Eglooz. But as Mr Albert makes clear, the pandemic has catalysed the uptake of technology in the sector, which accelerated a digital shift in the commercial real estate market too. In Bahrain, we have already seen evidence of this in the smart hubs and warehouses that emerged in response to COVID-19. Ultimately, the real estate landscape in Bahrain, as elsewhere, is facing an uncertain future. However, through savvy employment of technology, the sector will remain resilient, competitive and innovative.
Jolyon Kimble is General Manager of the Bahrain office of APCO Worldwide, an advisory and advocacy communications consultancy
