The Sharing Economy & the Real Estate Sector: What’s the Impact?

What is the ‘Sharing Economy’?

The sharing economy is an umbrella term for a variety of goods and services exchanged between private individuals, usually facilitated through a company over a network. Driven by big data and the internet, the sharing economy connects those who wish to utilize a service or a product, but not necessarily want to buy it. One such example would be the start-up Zipcar from Massachusetts, which facilitates automobile rentals to its members, chargeable by the minute, hour or day as per their preference, allowing members the use of a car even for the length of a single shopping trip. The major advantage of this model for companies is the ability to do business while owning very little in the way of physical assets, allowing them to more easily compete with price as compared to traditional service providers. For individuals, the benefits of a lower price, access on demand and the ability to make money from their idle assets make them a compelling alternative to traditional services.

How does the sharing economy affect the real estate sector?

One of the most famous examples of a company based on the sharing economy is the San Francisco start up AirBnB. With 250,000 rooms in 30,000 cities across 192 countries, the reach and scope of AirBnB rivals that of major hotel chains, all without owning a single property.


As a result, AirBnB is now the second most valuable tech start-up in the world after Uber. With the advantage of a low operating cost compared to that of a traditional hotel chain, AirBnB can offer more competitive rates as well as have its members offer additional perks and benefits, such as locally guided tours by the hosts and exposure to the local culture, all of which are more appealing to the modern tourist craving an authentic experience than a pre-packaged hotel tour. Hospitality providers will need to adapt to the changing tastes of their customers in order to address this shift in the market by providing more value and a true experience rather than just banking on a star ranking.

The sharing economy in the Middle East.

The sharing economy in the Middle East is still young but it is growing with some of the major players, such as Uber and AirBnB already having a presence in the market. For example, AirBnB has a presence in the UAE and is regulated and available in Dubai and Ras Al Khaimah, with Abu Dhabi promising to regulate and legalize the service soon. There are no shortage of home-grown concepts either, such as Nester, a local app launched in Dubai, which aims to help ease the parking problem by connecting people with unused parking spots with those who need parking or Tnerit, another local app, lets people rent personal and household items on a daily and monthly basis.

The sharing economy at its core is about the efficient use of idle assets and this concept can be applied to almost anything. From renting out unused parking spaces with Nester, to providing shared spaces and amenities for freelancers to work such as with letswork or even sharing building amenities such as solar power or common areas, the sharing economy is changing the way we live, work and consume. The success of this system in mature markets such as the US and UK and local developments are promising signs for things to come.

Wondering about how to go about taking part in the sharing economy? Maybe identify opportunities to incorporate this kind of thinking in your projects? Land Sterling has an experienced team dedicated to strategic research and we would be happy to help. Send us an email at or call us on +971 43 808 707.