Originally published via Construction Week Middle East.
Construction is one of the leading economic sectors in the GCC, with the UAE emerging as a key component to the global construction industry.
While many may find the metaverse to be a mythical place, the similarities between the metaverse and real estate in the physical world aren’t all that different.
The Dubai Economic Agenda ‘D33’ outlined an agenda to create new economic value via digital transformation, at a rate of AED100 billion yearly, with Dubai entering a new era in which it wants to pioneer and sustain the growth of an economy based on information, innovation, and future technologies, with digital transformation at the forefront.
The metaverse will intersect with the global construction and real estate sectors.
Physical vs digital
With a projected revenue of construction in the UAE amounting to approximately $37 billion by 2024, the sector certainly continues to boost the region’s economy.
Prices in some sectors of Dubai’s property market have increased as much as 56 percent over the last year, fuelling interest in new construction, with March, April and May 2022, displaying the highest levels of real estate transactions in over a decade.”
Much like the growth witnessed in the physical world, the land component of virtual real estate has also recently received much attention.
To compare growth rates, between 2019-2022 the real world real estate market experienced growth of approximately 39 percent. Over that same period, the virtual land market grew 879 percent, as per Chainalysis.
With over 100 million square feet of virtual real estate development already completed, and examples of early adoption across several verticals, including premier luxury property developers, top tourist destinations, and government officials all entering the metaverse to tap into a new virtual, global audience- the outlook for 2023 is an attractive one.
Metaverse impact on construction
Immersive computing and remote collaboration
The use of immersive technology and computing in the metaverse for a more remote collaboration during design and planning will lead to identifying more efficient resources. The metaverse impact on projects could act as a testing ground for real-world tasks such as using VR/AR to test traffic flow, area acoustics and driver-less car scenarios. Using VR/AR to immerse teammates and clients in 3D spaces can eliminate the need for in-person meetings and business travel, while speeding up approvals and shortening design-to-construction timelines.
Architects can visualise their work in a 3D work environment using VR/AR. This would entail employing technology that will allow workers to create models, interact with the physical environment and demonstrate their creations to customers more efficiently and easily. There are numerous possibilities for using the metaverse in the real world.
Utilisation of digital twins
Researchers and practitioners have recently committed to revolutionising and digitising infrastructure and creating digital twins. Digital twins act as a virtual representation of real-world assets, such as buildings and systems, that includes associated data.
This is an important part understanding the metaverse impact on industry, as the value for users comes from the data, including operational details and service history. By implementing the use of digital twins, users can visualise future states and optimise goals through advanced analytics, which then can be developed independently by multiple partners at the site or state level.
With an aim to generate 40,000 virtual jobs by 2030, the opportunity for in-demand jobs in virtual real estate could soon be something we should prepare for. Some of the real-world real estate positions we see will eventually translate over into virtual real estate employment opportunities, such as for landowners to enable them to sell raw land to developers that would help in building incredible virtual experiences.
Land planning and design job opportunities where individuals have the chance to personally decide on how to best break up the land itself. Contractors and subcontractors will contribute towards landscaping, interior design, fixtures and more.
Opportunities within property management will increase for individuals who are responsible for rent collection, maintenance, customer service, marketing and leasing and tracking of performance for the overall build.
In many real-world real estate builds, property managers will create committees of tenants to enact voting mechanisms on certain items like closing times, holidays and types of allowable businesses. In both real-world and virtual cases we see landowners coming together with designers and architects to map out builds that consumers would want to visit.
Citi estimated in a March 2022 report that by 2030, the metaverse impact-related economy could be an $8-13 trillion total addressable market.
McKinsey & Company reported that $120 billion had been invested in the metaverse in just the first five months of 2022, which is more than double than the $57 billion invested in all of 2021, with venture capital, private equity, start-ups, and established brands all seeking to capitalise on the opportunity.
We also see that, just like in the real world, there are people deep in the ecosystem of virtual lands that try to front-run development and buy up the most desirable land where they think they will be able to make a profit. All these activities run very closely alongside real-world developments.
However, the best way to make a profit with virtual land is by monetising it. This is just like the real world where businesses are built on top of plots of land to increase the value of said land.
Metaverse impact: outlook
As the metaverse continues to mature and become more widely adopted, it is likely to shape innovation in the construction and real estate industries for years to come. In the coming years, we can expect to see a greater emphasis on using immersive technologies and digital twins to improve the design, planning, and management of construction projects and real estate assets.
These technologies will enable companies to work more efficiently and effectively, saving time, resources, and money. They will also enable companies to better understand and analyse their assets, helping to optimise their performance and reduce risk. Further introduction of protocols will enable people and companies to come together, co-create, tokenise and trade metaverse experiences and business ventures in the open metaverse- thus making the accessibility far more accessible.
In the long run, the metaverse will likely become an integral part of the construction and real estate industries, helping to drive innovation and shape the way that these industries operate. As we move into the future, it will be important for companies to stay at the forefront of these developments and to embrace the opportunities that the metaverse presents.
The metaverse impact on the construction and real estate industries is likely to be massive and transformative. According to Amara’s law, we tend to overestimate the short-term impact of technology and underestimate its long-term effect. However, the metaverse is likely to have a significant and lasting impact on the way that commercial real estate operates and the ecosystem within which it exists.
This is an exciting time for the industry, as the metaverse presents new opportunities and challenges that will shape the future of construction and real estate. As the metaverse continues to evolve and mature, it will be important for companies to stay attuned to these changes and to be prepared to adapt and innovate in order to stay competitive.
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