Data intelligence and real estate – machines are the real game changer
| DOI | https://doi.org/10.1108/JPIF-11-2021-0101 |
| Published date | 22 December 2021 |
| Date | 22 December 2021 |
| Pages | 306-310 |
| Subject Matter | Property management & built environment,Real estate & property,Property valuation & finance |
| Author | Marcelo Cajias,Anett Wins |
Data intelligence and real estate –
machines are the real
game changer
Marcelo Cajias
Investment Strategy and Research, PATRIZIA AG, Augsburg, Germany and
University of Regensburg, Regensburg, Germany, and
Anett Wins
Investment Strategy and Research, PATRIZIA AG, Augsburg, Germany
Abstract
Purpose –The paper shows with two concrete examples about how algorithms are used in active real estate
management. The paper also highlights that the discussion about the adoption of new technologies is crucial
for market players.
Design/methodology/approach–The authors review the current status quo about new technologies in real
estate and provide two examples of how algorithms can be used to understand locations and the value drivers
of rents.
Findings –Location, location, location is nowadays data, data, data coupled with the knowledge of how to
create life out of data. Algorithm can help to understand the value drivers of rents and can also help to evaluate
the attractiveness of a location.
Practical implications –Real estate management will adapt to new technologies fast. This change has the
potential to disrupt exiting strategies due to the increase in efficiency, insights, transparency and location
knowledge. Investment managers walking this talk will definitely benefit in future.
Originality/value –The paper makes usage of the latest machine learning technologies appliedto real estate
investment cases. This is a unique opportunity on bringing light on the discussion about transparency in real
estate.
Keywords Artificial intelligence, Future of real estate, Algorithm-driven hedonic model, Multiple listing
system, Positive externalities, Rent value drivers
Paper type Viewpoint
The real estate cycle –quo vadis
The real estate industry is evolving faster than ever and has learned that its current strategic
setup must adapt in the near future. The way of doing business with real estate will change,
and investment managers’success might inversely relate to their speed in adopting new
technologies to make real estate management more efficient, transparent and sustainable.
However, the current market environment feels like a mix of actors with a clear mindset
between “business as usual”and “it is now or never.”In other words, new technologies are not
being equally adapted by the industry. This is indeed a strong assumption and a disruptive
thought at the same time. Still, real estate today requires the ability to deal with digitalisation,
machine learning (ML), tokenisation and internet of things (IoT), to name some. These
concepts are certainly in vogue and represent the real estate industry’sincreasing need to add
a new pillar to the foundation: real estate data intelligence.
The past decade has shed light on one of the industry’s darkest problems: lack of data.
The real estate industry is more the rule than the exception regarding a lack of transparency.
Perhaps, therefore, data collection has been the focus of many think tanks. One might think
JPIF
40,3
306
The authors especially thank PATRIZIA AG for contributing to this study. All statements of opinions
are those of the authors and do not necessarily reflect the opinion of PATRIZIA AG or its associated
companies.
The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/1463-578X.htm
Received 30 November 2021
Revised 5 December 2021
Accepted 5 December 2021
Journal of Property Investment &
Finance
Vol. 40 No. 3, 2022
pp. 306-310
© Emerald Publishing Limited
1463-578X
DOI 10.1108/JPIF-11-2021-0101
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