Dubai may someday be dominated by multimillion-dollar mansions, five-star hotels, luxury flats, and enormous malls in the metaverse. However, is it currently wise to put money into metaverse real estate? Or is it all merely the hoopla? Recent market information indicates that real estate sales in the metaverse hit $500 million in 2022 and are projected to increase significantly in 2023. From 2023 to 2028, the metaverse real estate industry is anticipated to expand at a CAGR of 31%.
Not so long ago, the Dubai Government took step to develop Metaverse strategy and the goal of the Dubai Metaverse strategy is to:
- Expand Dubai’s technological infrastructure to effectively draw 1,000 or more businesses in the important fields of Blockchain and Metaverse.
- Promote goals for Dubai to sustain 40,000 or more virtual jobs by 2030.
- Encourage innovation that will improve the Metaverse’s economic contribution with the aid of R&D partnerships. And to support an advanced ecosystem by utilising incubators and accelerators, which significantly draw projects and businesses to the Dubai region.
- Attract and retain the right players and qualified talent and invest in future capacities by providing essential support for Dubai Metaverse education geared toward digital platform users, developers, and content creators in the Metaverse community.
- Create pertinent Web 3.0 technologies and related applications to create new work models for the government and to further the development of key industries like education, retail, tourism, healthcare, remote work, and the legal sectors.
Dubai dipping its toes in real estate Metaverse to fuel economic growth
The two main Metaverse enablers, VR and AR, are credited with creating 6700 jobs and contributing close to 500 million USD to the UAE economy, both of which are anticipated to grow dramatically in the near future. Particularly, Dubai Metaverse offered a distinct range of financial benefits or chances. In the year 2021, the value of venture capital and private equity financing in the Dubai Metaverse market reached 13 million USD globally. Real estate transactions last year exceeded 500 million USD in the Metaverse category.
By 2030, analysts predict that the metaverse will sufficiently contribute over USD 5 trillion to the world economy. NFTs are predicted to reach a market worth USD 80 billion successfully. By the end of 2025, it is predicted that tech enthusiasts and younger generations will spend close to 75 billion USD on video games. One of the largest global Metaverse communities, Roblox, is thought to have 55 million daily active users as of January 2022, up from 45.5 million in the previous year.
Dubai Metaverse developers creating immersive virtual worlds
Top Dubai-based businesses are rushing against the clock to create immersive virtual worlds or metaverses to boost their sales prospects and transform client experiences in their respective sectors. Real estate giant Damac has committed up to AED367 million ($100 million) to creating and commercialising a metaverse that would enable potential clients to digitally check into its opulent residences, select an apartment, look at furniture alternatives, and experiment with the paraphernalia and gizmos on offer.
Creating digital replicas of Dubai’s iconic projects
The digital replicas of properties for sale in Dubai, such as DAMAC Hills, DAMAC Lagoons, Safa by De Grisogono, and Cavalli Tower in Dubai, will be made using the Dubai Metaverse platform called D-Labs. It will also house other illustrious projects like the planned Cavalli Residences in Miami and the DAMAC Tower Nine Elms in London.
Then, how does this operate? First, rather than speaking on a Zoom call, a prospective client from anywhere in the world can meet with the sales representative of DAMAC Properties in person. The potential tenant can then visit the apartment inside the metaverse and pay for it while checking out.
We conduct monthly sales over Zoom calls of over AED 100 million without using any immersive technologies. According to Ali Sajwani, general manager of operations at DAMAC and CEO of D-Labs, “With the Dubai Metaverse, we can easily sell properties for sale in Dubai. The transactions worth can go as high as AED700-800 million a month to any clients in California, New York, or Miami.”
According to Sajwani, the company, which has been doing $5 billion in real estate transactions yearly, anticipates making $6.5 billion through properties for sale in Dubai metaverse.
Real Estate Metaverse – Can it be disruptive?
The disruptive character of Metaverse, which challenges conventional perspectives on a category and develops a new business model, is largely responsible for its success. According to the property agents in Dubai, the days of real estate buyers’ closing transactions based on brochures and project plans are long gone.
Instead, people are not only interacting with the properties for sale in Dubai in real-time, but they also have the choice to make purchases while taking virtual tours. The advent of metaverse has brought a mind blowing real estate buying experiences for the investors looking for properties for sale in Dubai. Customers might choose from various non-fungible tokens or rare digital items offered by D-Labs and sell them for a higher price later. For instance, the business will soon provide a range of NFTs, such as digital jewellery and wearable.
You are supposed to be the owner of both physical and digital things. The De Grisogono re-launch will also include the sale of digital jewellery. However, the objective is to make that consumer an owner of actual assets as well as digital ones, according to Sajwani. In the first half of 2022, more than $120 billion has been invested globally in creating metaverse infrastructure and technology, according to management consulting company McKinsey & Co. In comparison, the $57 billion invested in 2021 was more than doubled.
Two-thirds of consumers surveyed by the company recently expressed excitement about moving commonplace activities to the metaverse, particularly when interacting with others, exploring virtual worlds, and working with distant co-workers. According to Eric Hazan, senior partner at McKinsey, “Our bottom-up view of consumer and industry use cases implies it (metaverse) might produce up to $5 trillion in impact by 2030.”
Putting a strategy in motion
How Will Metaverse Impact the Dubai Real Estate Sector? This must be the question that you are asking yourself after knowing about Dubai Metaverse strategy. The ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum, has unveiled theDubai Metaverse Strategy to bring the metaverse sector’s economic contribution to the emirate to $4 billion by 2030. Companies are currently considering how to create metaverse platforms that might launch trial projects, research consumer behaviour, learn from in-person encounters, and develop the business model in light of the government’s proactive role.
They are further putting gears in motion to elevate the whole experience of buying properties for sale in Dubai through metaverse. Another early adopter of the Dubai Metaverse, Emirates Airline, revealed that it would soon offer a piece of immersive technology that would allow customers to virtual experience flying on the upscale airline.
During a press roundtable, Emirates Chief Operating Officer Adel Ahmed Al-Redha remarked, “These projects will allow customers to change their whole processes, whether it’s a company operation, training, or sales force, into an interactive experience in the metaverse.” In addition to choosing their seats and the food and drink, customers can explore the aircraft as part of its metaverse offers and experience first, business, and economy class.
“The consumers may also visit the airport, shop in duty-free while at home, and have their purchases delivered to them there or on the plane,” he continued. Emirates has been considering digitisation for a while. However, they lacked the necessary technology and are now working with other tech firms “to ensure we have the correct stuff,” according to Al-Redha. Al-Redha belongs to the visionary company leaders benefiting from the first-mover advantage. It will be interesting to see how they disrupt current business models and develop newer consumer engagement avatars using this technology for fresh vegetables.
