The use of AI in Japan's property management industry is progressing rapidly, driven by measures to address labor shortages and improve operational efficiency. Importantly, AI should be positioned as a tool to maximize human creativity and judgment, rather than something that takes away human jobs. One leading company in the real estate industry is saving 9,000 hours of work per year by using AI and RPA together, while reallocating that time to building deeper customer relationships and strategic work. The latest research shows that effective use of AI in the property management industry can both maximize human capital value and organizational growth.
In the property management industry, AI is being used in a variety of areas, including chatbots, automated assessments, and predictive maintenance, and companies that have adopted AI are not only improving operational efficiency, but also enhancing the customer experience and creating new value. The key to success in this digital transformation lies in the optimal division of roles between technology and human resources, and in human resource development strategies suited to the AI age.
The Japanese AI system market is expected to reach 685.8 billion yen in 2023 (up 34.5% from the previous year) and expand to 2,543.3 billion yen by 2028. The AI market in the real estate management field is also growing rapidly, especially after 2023, and is further activated by the emergence of generative AI.
AI applications in the real estate management industry are progressing mainly in the following areas
Condominium management: AI services such as "Chat Manager" (GOGEN) and "AI INFO" (Daikyo Group) provide 24-hour, multilingual resident support to streamline management operations and improve resident satisfaction.
Real estate price assessment: "Re-House AI Assessment" (Mitsui Fudosan Realty) instantly calculates estimated contract prices of condominiums by having AI learn from actual contract data. Yesil" also provides highly accurate assessments compared to the market and competition.
GMO Rental DX's "AI Reply Assistant" automatically generates responses to chats from owners and tenants . Mitsui Fudosan's "&Chat" is used for reporting and other purposes, contributing to a reduction of 9,000 hours of work per year.
As for the effects of the introduction of AI, Mitsui Fudosan reported a reduction of 9,000 hours of work per year by combining RPA and AI, and Open House reported a reduction of 20,000 hours of work per year by using an automatic online flyer creation system.
On the other hand, challenges unique to the Japanese market include an aging population and labor shortage, difficulties in converting from an analog culture, delays in data standardization and maintenance, and adaptation to a regulatory environment. The real estate industry, in particular, has long maintained an analog business structure and faces psychological resistance to digitalization and AI.
In the field of rental management, AI is used in a wide range of areas, from tenant selection to rent setting and contract management:
Tenant selection and screening: "Propertyware AI Screening" predicts a prospective tenant's ability and willingness to pay by utilizing over 30 million rental history data. In some cases, the introduction of AI Screening has reduced the percentage of underperforming tenants by up to 50%.
Rent setting and price optimization: "Gate." utilizes big data and AI to achieve highly accurate rent prediction with an error rate of 4.98%. AI" automatically analyzes the prices of similar properties in the surrounding area and presents market rates as a benchmark.
Contract management: "LeaseLens" automatically extracts contract details by simply uploading the lease agreement and completes the task in minutes.
In the field of property maintenance, AI is showing its true value in predictive maintenance and energy management:
Predictive maintenance: "Buildings IOT" combines IoT sensors and AI to detect abnormalities in building equipment at an early stage. In one case, downtime was reduced by 80% by taking action before breakdowns occurred.
AI chatbots and AI are also being used in customer service to improve tenant satisfaction:
In property management for ultra-high-net-worth individuals, advanced AI solutions are being developed with a particular focus on privacy and security:
Bank of America Private Bank Specialty Asset Management provides AI-assisted services for comprehensive management of non-financial assets (real estate, farmland, forests, etc.). It manages assets with a total asset value of $12.6 billion and provides integrated analysis of real estate and financial assets.
BNP Paribas Wealth Management provides an AI platform that integrates real estate investment and private banking for ultra-high-net-worth individuals in the Middle East. The AI system is regularly updated in collaboration with legal experts in each country to comply with laws and regulations across multiple regions.
Villa Cascade (Phuket, Thailand) uses AI to optimize the living environment of ultra-luxury villas. It learns the owner's preferences and automatically adjusts lighting, HVAC, and entertainment systems.
Quintessentially Estates provides AI concierge services for ultra-luxury real estate.
For ultra-high-net-worth individuals, advanced security systems combining facial and biometric recognition with AI are also available. Security camera management systems with real-time AI object detection, such as Frigate, identify objects causing movement and provide comprehensive security.
AI utilization in real estate management has distinctive characteristics by region:
North America: Largest AI real estate market, with advanced HVAC optimization AI such as JLL's "Hank" system and highly accurate automated price evaluation models such as Zillow's "Zestimate.
Europe: characterized by AI applications focused on sustainability and energy efficiency. Stringent environmental regulations and energy performance standards are driving the adoption of predictive energy optimization AI like "BuildingIQ" and predictive maintenance systems like "Inferential".
Asia Pacific: Singapore, Australia, and China are leading adoption, with Japan showing more gradual adoption.
International advanced technologies with high potential for application in the Japanese market include
Real estate investment optimization through predictive analytics: Systems that utilize machine learning algorithms such as JLL and Skyline AI to analyze hundreds of variables to predict property values, rental growth, and investment returns with high accuracy.
AI-driven building management systems: systems that use AI, such as JLL's Hank, to continuously optimize HVAC operations to improve tenant comfort while reducing energy consumption by 30-60%.
Virtual and Augmented Reality Property Tours: AI-powered immersive 3D property tours and automated feature recognition and spatial measurement technology from companies like Matterport.
AI-enabled customer relationship management: platforms that use interactive AI like Ylopo and EliseAI to respond 24 hours a day with potential buyers and tenants to achieve a 48% response rate and high viewing conversion rates.
Successful examples reveal optimal collaboration models between AI and human resources:
Mitsui Fudosan Group: Human resource resources created through automation of routine tasks by AI are reallocated to higher value-added customer service and strategic tasks. AI Avatar" automates initial customer service, while "AI Compatibility Assessment" provides property suggestions tailored to the customer's needs.
Open House: Automated online flyer creation system saves 20,000 man-hours per year. That time is used to train sales staff and increase time spent interacting with customers.
GMO Leasing DX: When providing an "AI reply assistant," a workflow is adopted in which AI-generated text is not automatically posted, but is added or revised by the property management company's staff before being sent out, combining AI efficiency with human professional judgment.
The following approaches are effective in training human resources to cope with the AI era
Specialized skill development programs: Provide training focused on developing the ability to operate and manage AI tools, analyze data, and appropriately evaluate and correct AI output results.
Strengthening human-specific skills: Providing training to enhance "advanced human skills" that cannot be replaced by AI, such as empathy, negotiation, critical thinking, and complex problem-solving skills.
Combination of OJT and AI: Provide on-the-job training that compares the results of analysis by AI with the empirical rules of experienced employees in the field to develop human resources who understand and utilize the advantages of both.
Creation of new professional positions: Create new positions such as "real estate tech specialist" and "property data analyst" to develop hybrid human resources that combine traditional property management knowledge with AI and data analysis skills.
The following framework is effective as a principle for optimal role sharing:
Division by decision-making hierarchy:
Specific roles in business processes:
Future trends in the use of AI in the property management industry are expected to include
Evolution of generative AI and expansion of application areas: Evolution of large-scale language models such as ChatGPT will enable more natural interaction and advanced operational support.
Integration of AI and IoT: With increasing integration with smart building technologies, the integration of real-time data from sensors and AI analysis will further develop.
Integration with blockchain: AI and blockchain technology will be increasingly integrated to improve transparency and security of real estate transactions.
The following initiatives are important for balancing AI and human resource value in the property management industry
A phased implementation approach: Start by automating routine tasks initially, then gradually expand to advanced analysis and decision support to maximize return on investment while measuring ROI.
Promotion in tandem with human resource development: AI implementation is promoted in parallel with the development of human resources with AI application skills, combining the reskilling of existing employees with the hiring of AI personnel.
Structuring mutual learning between AI and humans: Establish a cycle of mutual learning, where AI learns from human judgment and humans gain new insights from AI analysis.
Redefine and share human value: Discuss, define, and share within the organization the unique value of humans that cannot be replaced by AI, to improve employee motivation and clarify the direction of human resource development.
The use of AI in the property management industry should be viewed as an enabler to maximize the value of human resources, not just a tool to improve efficiency. INA&Associates, Inc.
For human capital investment companies like INA&Associates, the use of AI technology is an opportunity to expand, rather than reduce, the value of human capital. The key to success in the coming AI era will be to simultaneously pursue technology investment and human capital investment, and to create a management philosophy and practical framework that harmonizes the two.