Technology

But technology in real estate goes far beyond tools to help us reach net zero. It encompasses everything from intelligent security systems, the Internet of Things and AI-powered predictive maintenance solutions, through virtual tours of the ‘digital twins’ of buildings, to complex issues around the use of cryptocurrencies, smart contracts and tokenisation in real estate deals.

And while our survey shows that most global investors (88%) believe that the real estate industry is keeping up with technological changes, the picture in the UK is more ambiguous.

Only 50% of those we questioned in the UK feel that the industry is keeping up – a noticeable dip from the 57% we recorded in 2022.

Do you agree that the real estate industry is keeping up with technological changes?

Technology has always been a driver and an empowerer for real estate. Nobody could have built skyscrapers if the elevator hadn’t been invented first, or developed out-of- town retail in an era before affordable mass-produced cars. But digital transformation will affect every type of property, in ways that are still unfolding, and with an impact that will take decades to play out.

New properties may be state-of-the-art, at least for a time, but for most of the built environment the question will always be how to reconfigure and adapt real estate, ensuring synergies between old and new. Technology that transforms real estate often does so by enhancing or interacting with the previous generation of developments.

Says Dominic Dryden a partner in the CMS technology team: “Data-driven and AI-powered technology is delivering significant new value to the real estate sector. But real estate investors and managers are also focusing on how it can help them to remain competitive and adapt existing assets to the major challenges of today – not just climate change but demographic, economic and social change.

“On a macro level, technology is changing the way our clients plan, develop and buy and sell real estate. It is also having a substantial impact building by building. We have seen this in the rise of ‘smart’ offices that collect data from sensors to manage energy consumption, working patterns and maintenance needs.

“But the use of innovations such as big data and AI in real estate can also raise novel legal challenges, for real estate investors, managers and tenants alike. We’re advising a rapidly growing number of forward-thinking clients on how to unlock the transformative power of technology, whilst managing any risks appropriately and commercially.”

Investment may be challenging at a time of reduced access to capital, but some investors may need to do more to keep up with technology. The rate of transformation is increasing, accelerated across different asset classes by everything from hybrid working to remote healthcare.

Ultimately, the smartphone will change real estate as much as the car or the elevator ever did.