It is fair to say that real estate companies have not traditionally been envied for their technological expertise. Given that relatively few have dedicated leaders to drive this, it is not surprising.

Last year’s Property Week and Freeths Power of Proptech survey revealed that almost half (49%) of companies did not have a chief technology officer (CTO) – a position that usually helps shape strategy and drive take-up of new tech.

However, many still believe that responsibility for tech strategies should be held by their IT or marketing teams, according to Sarah Davenport, managing director of recruitment company Capstone.

She says she has seen some increase in recruitment for dedicated technology leaders in recent years but, for the most part, it has been where tech nous is added to existing roles rather than dedicated senior hires.

“That is understandable while firms are exploring what AI can do, but it carries risk if leaders are not specialists or lack diverse external thinking,” she adds.

The recruiter believes that the pace of AI innovation means the sector needs to “move beyond bolt-on responsibility” and bring in specialists with greater knowledge as soon as possible.

“Many senior leaders are not natural early adopters, which suggests there is a real opportunity to approach AI leadership differently in property, with clearer ownership and sponsorship at the top,” Davenport says.

Faisal Butt, managing partner of Pi Labs, a venture capital firm that backs proptech founders, agrees, especially in the era of AI advancement. “You’re dealing with a fundamental technology shift, and the current management teams of these real estate companies are just not geared up to take advantage of this huge AI opportunity,” he says

Butt believes there will be a big rise in CTOs in real estate companies’ C-suite teams as they realise the scale of the change being brought about by AI. “I think those real estate organisations that are using AI for sourcing deals that others may not have seen, underwriting them fast using AI and then, once acquired, being able to really flex the right drivers to create value in that asset are the ones who are ultimately going to win over the next five years,” he explains.

Test drive

In November, a global survey of 1,000 real estate companies by JLL showed 92% were launching, or were about to launch, AI pilots, but only 5% of those had actually achieved most of their programme goals.

Asked if firms should be cautious given such findings, Butt says companies “shouldn’t just jump at the opportunity of hiring a CTO; they should do the math on it”. Nevertheless, he believes that due to the potential for AI tools to “replace certain members of the organisation”, the sums will usually add up.

Landsec recruited its first chief data and technology officer in June 2023, a few months after ChatGPT released the breakthrough version of its chatbot and kickstarted a frenzy of expectation about the potential of AI.

Nisha Manaktala, previously CTO at insurance firm Hiscox Re & ILS, took on the role. She tells Property Week that while the decision was influenced by the advent of the technology, a big part of her role is to cut through such hype. “This role was created in a bid to bring somebody in who could sift through the noise, separate fact from fiction and be able to drive competitive advantage [and] innovation and extract value from technology investments,” she says.

To that end, the REIT, which has a £4.8bn market cap, has layers of research and development and testing in place to ensure it invests in tools that work.

The technologist can understand the right solution to apply for the right problem
Nisha Manaktala, Landsec

A digitisation taskforce chaired by Landsec chief executive Mark Allan includes representatives from across the company to discuss business issues and the potential for AI to solve them, while an ‘AI test lab’ oversees pilots to evaluate technology and whether it is worth using.

“[The taskforce and the test lab] are heavily looking at this stuff, so it’s not just a technology team; we are looking at these with a clear business lens,” Manaktala says.

She adds that there are about 20 different use cases being trialled, although she is guarded about revealing what they are.

The company’s smart building platform is “leveraging AI” and is an example of where results have already been seen, Manaktala says, while a LandsecGPT chatbot was rolled out around a year ago for internal business use.

“We’ve also used an element of generative AI through agents we’ve launched for CRM [customer relationship management], to help in creation of leases,” she says.

The firm’s strategy extends to earlier forms of AI, Manaktala stresses, having “done a ton of traditional AI automation” – using machine learning that pre-dates the large language models (LLMs) – such as optical character recognition for automating document-based processes.

AI is only one part of a wide-ranging role that also looks at other ways to improve business efficiency through technology, she says.

In October 2024, SEGRO created a new role of chief information officer – which the industrial development firm says is equivalent to a CTO – hiring former Department for Work and Pensions digital director Richard Corbridge, who reports to group operations and customer director Paul Dunne.

Corbridge says his job is “essentially to simplify processes, from automating lease management to streamlining maintenance requests”. He adds: “In turn, this creates time for our people to focus on what they do best, such as building strong customer relationships or optimising asset performance.”

Last month, SEGRO set up a digital board to guide assessment of new tech and its work with HCL Technologies and IBM, companies it has hired to help develop bespoke tech solutions.

Corbridge says that last year the company digitised more than 1.2 million documents to improve knowledge-sharing, and future work plans include refining its use of data to help spot underperforming assets.

Top priority

Davenport believes it is crucial that CTOs either sit near the top of a company or are considered important by senior personnel.

“Executive level, or a direct line to it, is usually required where the role owns data strategy, AI governance, investment cases and adoption across teams,” she says. “Without senior ownership, transformation quickly becomes fragmented and inconsistent.”

Davenport adds that a CTO can work below the C-suite if there is “strong CEO or COO sponsorship” and the role is focused on delivery.

“What matters most is not the title, but whether the individual has the authority to make a complex and often feared topic accessible, and to hold people to account against clear business priorities,” she says.

But what about smaller companies without access to the resources of a large REIT? Does it really make sense for them to allocate resources to employ dedicated CTOs when they have so many other business priorities to tackle?

According to Manaktala, the CTO position is about being a business leader with an understanding of technology, helping to ensure the best tools can be used appropriately.

“The technologist can understand the right solution to apply for the right problem and make sure it’s done in a safe, secure, responsible and innovative way, [and] thinks of the future, the scalability of it and so on,” she says.

“You might have different types of CTOs, depending on the type of business, but any business today that wants to be truly successful, if they don’t have an in-house tech team, they are partnering with an organisation that is doing tech for them. You’ve got to weigh up the pros and cons of keeping that outsourced versus bringing it in.

“My view would be that to succeed in this fast-paced world of tech, especially with AI, you want to bring that technologist in.”