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    How the ecommerce Industry May affect Real Estate in UAE

    11 OCT 2017


    In the UAE, popular holiday destinations such as Dubai, Abu Dhabi, Ras Al Khaimah are famous for their shopping malls, places of tourist interest and other commercial real estate locations.

    The real estate market as we know has two main categories, residential and commercial. While technology has entered both these categories, most of the impact is on the commercial segment. With ecommerce and online retail business growing exponentially, these commercial establishments seem to have taken a hit. You may argue that there is no connection but the fact remains that the customer who used to walk into a shop earlier to buy things is now doing the buying activity from the comfort of his home using online channels and making payments via ecommerce. The transaction still happens and the economy still grows, but the money is now settling in a different pocket.

    The Impact

    No wonder then that a number of commercial establishments in Dubai have invested heavily in the online retail business by purchasing major stakes in these ecommerce shops. Amazon, a big player in the online space, has entered into the foray with a large investment in the market. All this has impacted the real estate sector and will have a long a term effect on the market.

    The customers are now slowly moving towards this mode of shopping. The gradual effect of this can be seen in the reduced number of footfalls in the malls and shops. Though this is not a very big number for now but it surely is something that the investors of commercial real estate should keep a close watch on.

    The silver lining on the cloud

    While we are looking at technology bring about this negative change in the industry, there seems to be some positive aspects of the use of technology as well. Ecommerce has helped make the purchases and pay the rents easily. Often times it considered as a chosen means to search, select and purchase real estate. With technology such as virtual reality and augmented reality, the buyers can actually experience what they are going to buy, even before they get it.

    Technology is impacting us in all walks of life and though some industries are quick to adopt and go to the next level, the real estate industry is on its own pace and seems to be taking it piece by piece to evolve and gain from the advancements of technology.