Tipping point for AI adoption in commercial property industry as 3 in 4 execs prioritise automation in 2024
A new national research report by MRI Software suggests frustration by senior professionals working in Australia’s $31.4 billion Commercial Real Estate (CRE) industry with how steeped it is in manual processes and large volumes of disparate data sources. At the same time, almost half are keen in FY24 to prioritise digital automation technologies other industries have been quick to embrace like Artificial Intelligence (AI), Internet of Things (IoT), and predictive analytics.
According to MRI’s new Digital Transformation Journey report released this week more than three in four (76%) CRE C-suite and director-level industry professionals cite automation as an urgent priority across all aspects of their business between now and 2028. An indicator of an imminent tipping point is that 47% also cite AI specifically as a priority in that same timeframe, 46% intend to prioritise IoT (Internet of Things) or ESG-initiatives like “smart buildings”, and only 29% plan to pursue predictive analytics solutions.
URGENT CALL BY CRE INNOVATORS
Along with data from 100 C-suite and director-level survey responses, MRI hosted in-depth interviews with nine industry transformation and sustainability leaders from Cygnet West, Investa, ISPT, JLL, Property Council Australia, Property Funds Association, QIC Real Estate and Schneider Electric to apply their experience-based insights to the findings.
Speaking to the report findings, Advanced Analytics and Innovation Advisor to Investa, Joanna Marsh, suggests the discrepancy between an urgent need to automate and the lack of conscious intent to invest in property-industry specific digital transformation solutions is “short-sighted”.
“Unlike finance with its Bloomberg-based knowledge base, real estate lacks a singular data source. We have a huge amount of unstructured property-related data, and standard LLMs (large language models) aren’t going to cut it. We need real estate industry-specific AI language models that are trained to liberate data from documents and disparate databases,” says Marsh.
Nikki Steadman, Senior Director for Asia Pacific Professional Services at MRI Software takes an optimistic view of the 47% AI-invested result: “One could also look at that 47% and say optimistically that there is almost 1 in 2 industry professionals considering AI. That fact suggests we’re about to hit a tipping point in my opinion. AI technologies are a perfect fit for industries that rely on repetitive manual intervention to manage budgets, leverage insights from data and drive business operations – and as more leaders talk about it, and continue increasing their competitive advantage, adoption will naturally accelerate.
“Look at any industry that’s further down the road in digital transformation than real estate and they started with a few progressive thinkers and industry leaders. With today’s market and salary costs skyrocketing, the industry is really feeling the pinch. The progressive leaders profiled in our report are saying digital transformation is necessary, irreversible, challenging but exciting, with measurable return on investment,” says Steadman. “The next five years will be truly transformative for our industry.”
One such industry innovation leader, Amanda Steele, Group Executive Head of Property for ISPT believes that AI-driven technologies, particularly generative AI, will reshape the industry and transform the way services are delivered to industry clients.
“For our part [at ISPT], AI will allow us to focus on improving tasks like lease abstraction through technology, and to break down barriers created by large legal documents and complex contracts that are not very user-friendly and have historically been very expensive to handle,” says Steele.
“I think that technology, AI and the associated speed and efficiency of delivery can really improve our ability to personally connect with our tenant partners. And that’s the real sweet spot for us,” she says.
AI ADVANTAGES TO COMMERCIAL REAL ESTATE INDUSTRY
According to Mark Cohen, Asia Pacific Vice President for Product Innovation at MRI Software, AI offers a raft of everyday workflow efficiencies and benefits such as:
- Automating property and facilities management measurably boosts efficiency
- Creating best practice digital leasing processes and online tenant experience services
- Cost savings and accelerated adoption of sustainability-focused property innovations like smart building management
- Handling larger volumes of data for market research, predictive analytics and more informed strategic decision-making and creation of new products and services
- Using AI applications to uncover key insights hidden in corporate and legal documents to further streamline processes.
