The buying and selling of real estate companies has delivered some of the most significant long-term economic benefits of any sector since 2019, according to a new report.

The Dealonomics report from Taylor Wessing and Bayes Business School found that with an average value of $1.9bn (£1.4bn) for large deals, real estate has seen the second-highest deal value behind life sciences ($4bn) for individual deals since 2019.

Real estate also had some of the highest percentages of reported long-term economic benefits directly attributed to mergers and acquisitions (M&A), the report found.

This included 85% of dealmakers reporting that real estate deals were beneficial to job creation, 86% reporting higher-performing industries and 80% saying that real estate M&A leads to more productive economies.

While 44% of dealmakers reported regulation as the greatest barrier to M&A overall, when examined by sector only 30% identified it as such in real estate.

The majority of real estate dealmakers view regulation positively – 60% in the UK and 72% in the US.

By contrast, 60% of energy and infrastructure dealmakers consider regulation their biggest barrier, double that of those in real estate.

Instead, the most significant barrier to real estate M&A was identified as due diligence complexities, with 43% of dealmakers citing this as an issue – the highest among all sectors.

Notably, 69% of real estate dealmakers said artificial intelligence (AI) and automation are already improving the due diligence process by enabling better deal evaluation and risk assessment.

While impacts such as faster origination and improved post-deal integration are emerging, AI’s most immediate influence is being felt in early-stage diligence and transaction readiness.

Michael Goldberg, partner at Taylor Wessing, said: “There’s no doubt real estate M&A continues to offer long-term strategic value for investors, especially in mature markets. But that value is increasingly harder to unlock, particularly in the UK, where acquirers face a challenging mix of high financing costs, planning uncertainty and pressure on operating margins. There are solutions in the works, however.

“AI is beginning to reshape how we approach due diligence – improving speed, accuracy and risk assessment – and we expect it to become a recurring theme in real estate deal-making over the next few years.”

Professor Scott Moeller, director of the M&A research centre at Bayes Business School, added: “M&A deals that represent the buying and selling of real estate companies are fewer in number, but they’re consistently among the largest by value, and that’s reflected in the strength of their economic impact.”