Property developers could make up to 40% additional profits through AI

Property developers could make up to 40% additional profits through AI

Real estate developers in the UAE and rest of the world could extend their profit margin in high-rise buildings by up to between 25-40 per cent of the total value of the project while reducing carbon emission by up to 15 per cent, if they deploy artificial intelligence in building designs, according to officials of a property technology start-up, Kaizen AI.

Kaizen AI has launched an artificial intelligence-powered proprietary technology, that claims to deliver up to 40 per cent tangible profits to project developers during construction, reduce carbon emission drastically, without changing the design. It is a real estate value optimisation AI platform developed in India. The company says it has generated nearly $4 billion (Dh14.6 billion) in tangible value for real estate developers worldwide.

“Our proprietary artificial intelligence-powered technology at Kaizen AI processes the design of any new building projects and finds gaps in the designs and it optimizes the solutions within seven days and if the client/developer approves, we submit the complete workable set of drawings, designs and structural plan in two weeks, instead of months,” Jay Shah, Founder and CEO of Kaizen AI, said. “Kaizen AI delivers ‘more’ with ‘less’ and helps the real estate industry to become more profitable and sustainable.”

Jay Shah, a Columbia University alumni and Anuj Shah, an UCLA alumni, returned to India after studies and after seeing a gap in the real estate design market, founded Kaizen AI in 2018. Kaizen AI was developed with in-house resources and funding, without external funding. It has successfully worked on 108 large-scale real estate projects in India and delivered a total of $4 billion profits, reduced construction area by 4.32 million square feet and reduced 562 million metric tonnes of carbon emission in India. It currently works with six of the top 10 property developers in India.

Real estate and construction sectors has historically been traditional brick-and-mortar businesses, that needs technology-led disruption. However things are changing. PropTech market size is growing at a compound annual growth rate of 16.80 per cent from $30.6 billion to US$102.4 billion. Rising use of a number of cutting-edge technologies and rising demand for cost-cutting measures are key market growth drivers. Kaizen AI is the latest innovation that will make the industry agile, financially and environmentally sustainable.

Kaizen AI is entering the lucrative GCC real estate market where planned and under-construction projects value stands at an estimated $1.36 trillion. Saudi Arabia accounts for 64.5 per cent of the total real estate project value or $877 billion while the UAE accounts for 21.6 per cent or $293 billion in value. A 10 per cent reduction in built environment or an increase of profitability to the tune of 40 per cent would make the region’s real estate a much more lucrative and more sustainable in the long run, experts say.

“We give the project developers the real-time optimisation and profit increase data that allows them to undertake informed decision. Kaizen’s AI-powered technology is a game-changer for the real estate sector that helps developers increase profitability by as much as 40 per cent in certain cases, when implemented at an early stage of the project development, where margins are shrinking due to materials price increase and inflation,” Shah says.

Built environment and real estate are traditional industries that needs technology-powered disruption. Kaizen AI’s innovative solutions could offer more than 40 per cent increase in profitability, while it has on an average delivered $27 million more profits per project and has reduced energy consumption by a significant amount, he said.

“As the UAE celebrates 2023 as the Year of Sustainability, it is important for all of us to try and contribute to it in our own way. Kaizen AI is making real estate more sustainable and we have decided to launch our solution as the UAE prepares to host COP28 later this year,” he added.

“The application of artificial intelligence within the UAE’s real estate market is quite new. The PropTech innovation is being integrated across a broad spectrum of use cases. These use cases range from providing enhanced property management experiences to aiding efficient property transaction and valuation procedures. As a team we will be glad to serve the GCC market as well,” he added.

AI-powered real estate solutions enable data-driven decision-making for developers that helps in cost optimisation and increase in profits. Once appointed to optimise the project, Kaizen AI scans the detailed engineering drawings and comes up with its results that are tangible savings in terms of cost savings and profitability. The company has started consulting a number of real estate development companies in Dubai to help them increase profitability by making slight changes to the original designs within the approved variation limit, powered by AI.

We have received very strong response from a number of property developers who were amazed with Kaizen AI’s cutting-edge AI-powered technology and we expect to help them increase profits from their buildings with our solution – that will help them increase their bottom line and reduce carbon footprint,” Jay Shah says.

The UAE’s built environment consists of 134,081,000 civil structures scattered across the country. Kaizen AI could change them – both in terms of financial output and environmental impact – with its innovative solutions. Real estate developers in the UAE and other GCC countries can now increase profitability, optimise cost and reduce emission, by deploying innovative cutting-edge technology brought by Kaizen AI that offers greater value proposition.

The rise of AI in Prop Tech is causing a paradigm shift in the real estate development industry, which has a history of slow adoption of new technologies. However, the rise of AI is transforming how properties are managed, buildings are built, and investments are made by providing more efficient and cost-effective solutions that promote sustainability while minimising environmental impact. Nearly 40 per cent of worldwide carbon emissions are contributed by building + construction industry. Kaizen AI has reduced the environmental impact of by 15 per cent by reducing operating carbon as well as embodied carbon emissions.

The UAE’s dedicated strategy towards AI and its initiatives to support the development of technologies is a great example of it. Global accounting firm PriceWaterhouseCooper (PWC) estimates that the Middle East is expected to accrue 2 per cent of the US$320 billion total global benefits of AI in 2030. In relative terms, the UAE is expected to see the largest impact of close to 14 per cent of 2030 GDP.

The firm is in discussions with prominent North American players, including projects with Brookfield and Marriott.

According to the annual real estate tech survey, AI and Machine Learning technologies will have the biggest impact on the real estate sector. The real estate field, like many others, is transitioning to a “data-driven” world and we are already starting to see a wave of technology-driven Property Technology (PropTech) solutions changing the way companies interact with customers in the industry.

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