The growing influence of artificial intelligence in real estate

Artificial Intelligence (AI) is increasingly influencing the real estate sector, with early adopters reaping benefits across operational and strategic domains. Recent reports illuminate this burgeoning trend, highlighting significant integration of AI technologies by commercial real estate owners and investors.

According to Deloitte’s 2024 Commercial Real Estate Outlook, over 70% of survey respondents from the real estate sector indicate that their organisations are either piloting or actively implementing AI tools. Meanwhile, CBRE’s 2024 European Office Occupier Sentiment Survey notes that one-third of occupiers are incorporating AI into their real estate operations, with 20% of these users recognising its transformational potential.

AI adoption is distinct across various real estate subsectors, demonstrating its versatility and broad applicability. In the hotel sector, particularly vital in Northern Ireland, AI is addressing challenges related to rising operational costs and labour shortages. Automation is being deployed in customer-facing processes such as check-in and room service, significantly relieving pressure on staff and reducing staffing costs. Budget hotels are leading this transformation, with automated check-in processes already well-established.

Similarly, in the retail domain, AI is shaping the consumer experience, especially among younger demographics. A report from financial technology company Klarna indicates that 76% of Generation Z anticipates augmented reality (AR) enhancing their shopping encounters, and 23% foresee AI or robot-assisted styling by 2040. Nearly 90% of retailers are reportedly planning to invest in generative AI in the coming 18 months to meet this growing demand.

Retailers are advised to harness AI to optimise logistics and enhance in-store experiences, without compromising on product quality or customer relations, which remain critical for brand sustainability.

The care home and health sectors are also poised to benefit from AI implementations. With projections indicating that 24% of the UK population will be over 65 by 2040, the need for advanced aged care services is pressing. AI systems, such as facial recognition technologies, are already being used to identify residents and carers, and detect unusual behavioural patterns. Wearable AI devices are also being trialled to promote independence among elderly residents. While AI can significantly ease the administrative load on carers, it is vital to ensure that it complements, rather than replaces, human interaction, which is essential in preventing loneliness and cognitive decline among the elderly.

According to CBRE, their research paper titled ‘What are the implications of AI for real estate?’ delves into the substantial advantages that real estate enterprises can gain from adopting generative AI. Their findings suggest that while AI is revolutionising real estate procedures, a balance must be struck to ensure that this technology enhances rather than substitutes human expertise and experience.

As AI continues to sculpt the landscape of industries worldwide, its expansive role in real estate becomes ever more apparent. Nonetheless, the sector is urged to adopt a prudent approach, ensuring AI implementations are reliable, ethical, and beneficial.

The eventual legislative frameworks surrounding AI will undoubtedly shape the future of these technologies in real estate. Organisations proactive in integrating AI responsibly are expected to be better positioned in navigating and thriving within an increasingly digital environment.

Source: Noah Wire Services