Artificial intelligence and data analytics are shaping capital allocation for REITs and although the upfront costs of proptech can be extremely high, early adoption can give businesses a sizable competitive advantage in the long run.
At the recent Nareit REITworld: 2023 conference
held this November in Los Angeles, USA, top executives of international REITs
and institutions emphasized that REITs can’t be afraid to close things down
that are not scaling for the benefit of the company. From the customer's
perspective, people are just looking for solutions, and at the same time many
proptech applications require a wider data set to really make sense. To stay
relevant and aligned with the hyperscalers, or the large cloud service
providers that sometimes pull teams into details at a granular level, it is
critical to already be exposed to the future generations of products and have
an idea about how infrastructure will be coming to market.
On the revenue management front and early
adoption of AI and other technologies in REITs, executives emphasized on the
importance of balancing the short-term need for immediate capital expenditures
against the long-term need for improvements. Although the initial cost of
proptech can be extremely high, early adoption can give businesses a
significant competitive advantage in the long term.
Addressing how proptech can advance ESG issues;
it would be impossible for REITs to compete and be successful in sustainability
without data. Companies need to create a common denominator across the
portfolio that allows the company to measure initiatives consistently, which in
turn creates an opportunity to “move up the curve.
(source:NAREIT)
