Artificial intelligence a real game-changer in real estate
Google CEO Sundar Pichai believes artificial intelligence will have a bigger impact on the course of human history than fire or electricity.
The combination of AI, the Internet of Things and big data is expected to upend the building blocks of the global economy, from modes of transport to business models and construction methods, redrawing the urban landscape and reshaping our societies in a way we cannot predict.
AI’s powerful algorithms can discern patterns and trends from the masses of data the digital world generates, enabling machines to make predictions and decisions more efficiently than humans.
Cities, buildings and businesses that can take a lead in harnessing the technology will wield a competitive edge and command a premium, and Charter Hall is well-advanced in preparing for the era of smart buildings.
The early impact of AI is already being felt in all sectors of the global economy, including real estate. At the back end, companies are using AI and big data to cut costs, and at the front end to cut friction from the customer experience.
Intelligent control systems coupled with data feeds from IoT sensors are delivering major reductions in operating expenses. Google recently announced it had ceded control of the cooling of its 15 massive data centres worldwide to its AI system DeepMind, which has achieved savings of 40 percent.
AI is being applied to water supplies to curb excessive use and find leaks, and to predictive maintenance of plant and other assets, making better-informed decisions that lead to increased reliability, higher uptime and fewer accidents.
Charter Hall is preparing its property portfolio to take advantage of these advances. For example, all new Charter Hall office buildings are future-proofed with an integrated communications network (ICN) or IT backbone that will be needed to connect multiple inputs and carry high volumes of data, enabling both building managers and tenants to take advantage of the IoT technologies of tomorrow.
At the interface between companies and consumers, AI is providing a business advantage by making life better for customers.
Charter Hall has currently rolled out the Comfy app, which gives tenants control of the air conditioning in their workspace using their smartphones. Over time, Comfy learns what users like and applies AI to deliver learned conditions for better comfort conditions as well as conserve energy.
Charter Hall’s Office Innovation Lead Craig Rodgers says airconditioning is a major operating factor for users of commercial real estate, and it is important to achieve the best conditions at all times. Comfy is the first of new technologies that connect people to their workplace with personlised control, allow instantaneous feedback and achieves significant energy savings.
“Comfy and other analytic platforms can look at how a building is operating and learn to deliver optimal user conditions as well as flag potential issues in a predictive fashion rather than reactively,’’ says Rodgers.
“We are looking at a number of technologies in this space with an aim to improve building performance as well as deliver exceptional user experiences for a better workday.’’
Also improving the customer experience, intelligent chatbots are making the process of buying, selling, leasing and maintaining property more user-friendly.
In the UK KPMG developed a tool for a British restaurant client to assess properties available for lease. It captures over 4300 different data points – from climate to crime levels, competition, proximity to transportation and demographics – to predict the value of available shopfronts in terms of expected revenues.
AI and big data are also providing property investors with powerful new tools to maximise returns.
Early adopters of AI in the building industry are proving it can significantly reduce the duration and cost of construction, and the use of AI in the US construction sector is forecast to grow by 450 per cent over the next five years.
But perhaps the greatest disruption that AI and big data will bring to the real estate sector will be indirect.
AI-driven developments such autonomous vehicles will completely change community planning goals and the future dynamics of cities, rewriting property values and building design criteria. Initiatives such as Microsoft’s CityNext and Google’s Sidewalk Labs are exploring these urban environments of tomorrow.
Charter Hall Chief Technology Officer Aidan Coleman says of all the new technologies set to disrupt the property industry, he believes artificial intelligence will be the most transformative.
“Fundamentally we are a knowledge-based business, and AI will be powerful in terms of utilisation of data to better inform decision-making and augment capability,’’ Coleman says.
“The best way to prepare is to keep learning, foster a culture that is open to new ideas and keep up-skilling. Tech disruption is coming, but the opportunities and market conditions are there for us to make a success of it.’’