The survey, which captured views of 750 CRE executives— owners/operators, developers, brokers, and investors—in 10 countries during the summer of 2019, shows that four of the top five countries for AI adoption are in Asia: Japan, Singapore, Hong Kong, and China. The Netherlands is in fifth, with Germany in seventh and the UK in 10th.
AI has the potential to create a positive impact on the entire CRE organisation, by helping capture, manage, and leverage data more effectively, says Deloitte, with its predictive capabilities increasingly influencing future profitability and returns.
CRE organisations seem to have only scratched the surface when it comes to using AI technology, with 63% of surveyed CRE executives planning to use it in the future. The differentiator for any CRE organisation may lie in its ability to coalesce the use of AI technology across its business and enhance predictive capabilities to result in smarter location decisions and improved tenant experiences.
Deloitte’s tips for how real estate owners and managers can leverage AI:
- Strengthen predictive capability. More than 55% of the surveyed CRE executives believe that AI can benefit sales and CRM and accounting and financial planning and analysis departments. “AI technologies have the potential to evaluate diverse sets of traditional and alternative data with significant speed and accuracy. They can make more sophisticated and accurate forecasts, do scenario-based analyses, and plan for the future.”
- Modernise leases. “Automating lease administration is a big AI opportunity for CRE organisations. The industry relies on duration-based leases, commonly classified as short-term or long-term. However, more than six in 10 of the surveyed respondents asserted that tenants prefer flexible leases as opposed to traditional ones. Notable rising demand for flexibility is witnessed in New York City, where the amount of space under flexible lease rose 44% year over year in 2018 and the UK, with 76% of respondents holding this view.”
- Explore new revenue opportunities. “The ultimate value that CRE organisations can derive from the use of AI is generating new revenue sources. As a very basic example, data about people’s movement within a building can potentially be sold to advertisers or urban planners to help them in their decision-making. In another instance, CRE organisations can collect in-store shopping behavior data, use AI technology to identify patterns and generate insights, and then sell those to institutional investors to facilitate investment decisions. CRE organisations could then sell the same insights to their retail tenants, which could influence decisions related to in-store inventory, etc.”