Take a trip back in time to 2015. A time when tech in real estate was niche. A time when, if you mentioned technology, you were directed towards the IT department. A time when if you talked about artificial intelligence or machine learning, people immediately thought of Skynet, of robots and were fearful that the rise of the machines would mean our jobs were all about to be automated.
Back in the present day, so much has changed. Proptech, real estate tech and construction tech are now bone fide investment classes in the property world, and tech is no longer the remit of the IT crowd, but is firmly established in the C-suite.
The coronavirus pandemic has served to accelerate the use of tech and highlight its importance. However, industry-wide understanding of AI and machine learning – and exactly how they can be used across real estate – still remains relatively weak. But with both set to become the cornerstone of how technology is used in real estate over the next five years, the race is on to understand more about how data, algorithms and those “robots” we once feared are going to transform the way the business of property is operated.
Like many things in tech, unless you are the programmer or the code – the real techie – you don’t really need to understand how AI or machine learning works. You just need to understand what it can do for your business.
“Ultimately the end user just cares about the final product,” says Angelica Donati, chief executive of Donati Immobilliare Group. “They care about the output. So, a lot of times they might not even know that AI is, what their software is running on. And all they want is the result and in all sorts of businesses, AI is what makes things run smoothly.”
From input to output
Richard Belgrave, sales director at MRI Software, agrees and says over recent years there has been a shift from caring about what the technology is to what it can do.
“The difference-maker is how AI is now positioned, which is influencing attitudes to it,” he says. “I remember back in 2015/16, we’d walk into a meeting and we’d be very much product-led – ‘Look at this amazing shiny new piece of kit. Look how cool and sophisticated it is’. Now we walk into a meeting and we talk about problems and solutions, which is what really resonates. That is essentially what enables an attitude change, because right now it isn’t seen as AI for the sake of AI, it’s seen as AI solving core challenges that have a financial and operational uplift when solved.”
AI and machine learning is already being used widely across the real estate sector, says Olly Freedman, regional director (Europe) at ReTransform – although many of us would never know it.
He lists seven as an example – budgeting and forecasting; valuation and cash flow analysis; sensitivity analysis; reporting, benchmarking and performance analysis; accounting and debt management; and accounting and property management.
“Where we see a really acute interest in AI right now is in supporting the aggregation and integrity of downstream data,” adds Belgrave.
He says tenants, managing agents, owners and investors are looking at how they make better and smarter decisions than they did previously – and than their competitors. The solution to that, he says, is good quality, trustworthy data.
“We’re now seeing machine learning used to pass through and support the creation and curation of that downstream data,” says Belgrave. “But if I go back for four or five years, it was very much looking at how AI and machine learning could influence the upstream data collection processes, about how to shave off 30 minutes in how we extract information. Now, it’s much more about, if tomorrow I need to rethink the way I do my business, I need to rely on good quality data in order to do so.”
It is an almost 180-degree turn on the point of technology and data from input to output.
And that about turn is signalling a pretty bright future for real estate and what it will be able to deliver to its end users.
“The emphasis is really going to be on giving people a much better, more enjoyable, more liberated experience,” says Belgrave. “And that’s whether you’re a tenant or whether you are someone on the go to the shops. I think we’re just going to see less friction and a lot more liberation of the counterparty across the real estate space.”
Donati agrees: “In general there will be much more attention to the end user, and you will home in on individuals as opposed to aggregate groups. I look forward to a future in which there will be end-to-end data continuity so that there will be continuous feedback loops across all different phases of an active life cycle and across assets in the built environment, so that we can look forward to a future where data is no longer siloed and left for dead, but it is used, and it is useful across the asset lifecycle.”
The future of real estate tech
Freedman has a somewhat more glamorous and star-studded view of the future of real estate.
“There’s going to be a lot more voice-activated analytics,” he says. “I mean, kids today do not type into the internet – they will typically talk to their phones in order to get responses back. And I think that will happen more and more.
“Some chat bots are not particularly good at the moment, but they will get better with AI and before long, you could have deep fake celebrities providing your customer service.”
Not just an AI-enabled future that allows the industry to seamlessly manage its assets and solve problems before they arise, but a future in which Tom Cruise or Meryl Streep could be welcoming us into our offices or built-to-rent apartments could be on the near horizon.
To send feedback, e-mail samantha.mcclary@egi.co.uk or tweet @samanthamcclary or @estatesgazette
