Multi-million-dollar mansions, luxury hotels, chic apartments, and mega shopping malls in the metaverse could soon become the mainstay in Dubai. However, is putting money into the metaverse real estate a worthwhile investment at this very moment? Or is it all just the hype?
According to recent market data from MetaMetrics Solutions, real estate sales in the metaverse reached $500 million in 2021, and the sales volume is expected to double in 2022. The metaverse real estate market is projected to grow at a CAGR of 31 per cent from 2022 to 2028.
A key topic of discussion at the ongoing Dubai Metaverse Assembly, leading experts in the virtual and brick-and-mortar real estate space call it a 'fantastic opportunity'. The two-day Assembly kicked off to an exciting start on Wednesday, September 28, with participation from over 300 global experts and 40 organisations.
While speaking at a session that discussed opportunities in virtual real estate, Ali Sajwani, general manager of operations at Damac and CEO of D-Labs, said the company makes $100 million per quarter from virtual sales channels.
"However, we believe the conversions from this form of sales are low. To mitigate this challenge, Damac has launched immersive digital twins on virtual platforms to showcase our properties, including apartments and villas," said Sajwani. In April this year, the company announced plans to invest up to $100m for its latest project to build digital cities.
"Prospective buyers can log into the digital communities and interact with their neighbours in the metaverse if they like," explained Sajwani. Since the company does not conduct transactions using cryptocurrencies, it has partnered with an Abu Dhabi-based intermediary that converts digital currencies into fiat monies.
"Metaverse has been a very loose term. We decided to go with a focused approach to enhance the current communities and enable future communities in the digital sphere," said Sajwani.
Meanwhile, Samuel Hamilton, the creative director at the Decentraland Foundation, said the metaverse is ushering in a new generation of the internet.
"It's not a game; it's more like social media. We're not gamifying the internet. It is the next iteration of social media and the internet," said Hamilton.
He also said the metaverse creates many opportunities, including the creation of embassies in the metaverse for smaller countries that cannot afford to build missions in every country.
However, Joe Abi Akl, the chief corporate communications development officer at Majid Al Futtaim and Guy Parsonage, partner and leader of PwC Experience Consulting, stressed the need for more training and regulations within the metaverse real estate realm.
Akl stated, "The metaverse is not new. It is a revolution of trends we have been experiencing for years. We have to keep evolving and learn how to build capabilities. Within the multi-fold challenges of web3 and the metaverse, the biggest challenge is education and training." Akl also said MAF has been training 3,000 employees to figure out the right capabilities within the sphere.
Meanwhile, on the regulations front, Parsonage said, "This is a massive opportunity which is not going away. The opportunity is significantly larger because of the combination of technologies. It's important to start realistically."
He said organisations could not just hand over the responsibility of building blockchain infrastructure within companies ground up to the marketing teams. It needs regulation, especially on the taxation front due to the crypto component, said Parsonage.
The first edition of the Dubai Metaverse Assembly saw participation from organisations like World Economic Forum, META, Binance, MasterCard, The Sandbox, Bedu, PwC, Accenture, BCG Digital Ventures, Dubai Blockchain Center, and DeCentraland, among others.
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