As AI technology continues to evolve and integrate into our lives, its impact on real estate is becoming increasingly significant.
Over 70% of real estate owners or investors that responded to Deloitte’s 2024 Commercial Real Estate Outlook indicated that their organisations were piloting or implementing AI more so than any other technology.
CBRE’s 2024 European Office Occupier Sentiment Survey also revealed that one-third of occupiers are using AI for their corporate real estate processes, with 20% of those regarding it as transformational.
As AI continues to evolve, it presents significant opportunities for continued growth within the real estate sector when considered within a wider economic context.
In terms of real estate assets, it is important to examine the sub sectors where AI is already being implemented and where it is likely that further integration will occur in the near future.
Let’s firstly look at hotels, which are an increasingly important sector in Northern Ireland. With rising costs and labour shortages being at the forefront of operators’ concerns, AI offers huge opportunities for the hospitality service.
It is likely that automation via AI interaction will be adopted for customer check-in, room service and other ad hoc requests, effectively easing time pressure on staff and reducing staffing costs.
Automated check-in processes are already common across several budget hotel chains, with these businesses simultaneously reducing staff overheads whilst maintaining the same levels of service.
AI will potentially also extend this to additional services such as luggage storage, room service and communication with guests – however, it will be interesting to see whether this technology will prove more popular amongst budget hotels as opposed to their luxury counterparts which place higher value on human interaction.
Demand for AI technology within the retail sector also appears strong, particularly amongst younger consumers. According to Klarna, 76% of Gen Z’ers expect AR to improve their shopping experience, and 23% expect a robot or AI assistant to be styling them by 2040.
With almost 90% of retailers planning to invest in generative AI in the next 18 months, it appears as though this demand could soon be met.
At CBRE NI, we believe that retailers should utilise AI to complement their physical retail experience and optimise business logistics - but should also be careful not to compromise product quality or customer experience, something which ultimately sustains the longevity of a brand.
Another industry which could derive benefit from the use of AI is the care home and health sector. It is currently estimated that, by 2040, 24% of the UK’s population will be over 65 years old, emphasising the growing need for an expansion of services that cater for the demands of an ageing population.
Current facial recognition technology has been successful in distinguishing between residents and carers, and identifying unusual patterns and behaviours, data which can prove very useful in terms of informing assessments and medication reviews and helping to avoid potential hospital admissions. Wearable devices are also being trialled in several care homes across the UK, with the aim of enhancing people’s independence and autonomy.
Although AI can aid the care sector, it is key that the benefit to seniors is considered. AI cannot replace human interaction, which is of the utmost importance to the elderly as it has been proven that loneliness can have a very negative influence and even speed cognitive decline.
In this instance, perhaps the most useful application of AI is where it relieves the administrative workload of carers to allow them more time for patient interaction.
At CBRE, our recent research report ‘What are the implications of AI for real estate?’ explores the use of generative AI in business, and the significant value real estate firms can obtain from embracing new technology.
As AI technology continues to reshape industries worldwide, its influence on real estate is becoming increasingly clear, yet the full potential of AI in real estate is still unfolding.
While the adoption of AI in real estate has been swift in some areas, it is important to recognise that AI should complement human experience, not replace it.
For the real estate industry, embracing AI is not just about keeping pace with technological advancements; it’s about future-proofing operations. AI offers real estate professionals the opportunity to streamline processes such as conveyancing, enhance predictive analytics, and improve customer experiences. However, firms must proceed with caution, ensuring that AI-driven insights are accurate, reliable, and ethically sound.
As legislation around AI develops, those who act now to adopt this technology responsibly will likely find themselves better positioned to thrive in an increasingly digital future.
- Brian Lavery is managing director at CBRE NI
