Property company shares have been caught up in a wider AI-driven market sell-off after investors began betting that automation could restructure parts of the estate agency and commercial property sector.
“The sell-off may overstate the immediate risk to complex deal-making, even as the long-term AI impact remains a ‘wait-and-see’. A lot of the tasks that traditionally justified fees, such as valuations, marketing copy, and enquiry handling, can now be automated quickly and efficiently.”
Jade Rahmani, Commercial Real Estate Analyst, Keefe, Bruyette & Woods
Savills’ shares dropped 7.5% in London trading last week, whilst International Workplace Group, owner of Regus, dropped 9%. British Land and Landsec declined 2.6% and 2.4%, with the sell-off spreading across listed property businesses.
It followed hefty losses on Wall Street, where US property giants CBRE dropped 12.5%, Jones Lang LaSalle fell nearly 11%, and Cushman & Wakefield plunged to 9.1% over two sessions.
“A lot of the tasks that traditionally justified fees, such as valuations, marketing copy, and enquiry handling, can now be automated quickly and efficiently.
“That naturally creates concern around margin pressure and long-term relevance, which investors are clearly reacting to, particularly in London, where agency and portal stocks are highly exposed to tech disruption.
“Lettings remains a people business. Compliance, negotiation, tenant quality, and local market insight can’t simply be replicated by an algorithm. The agencies that will thrive are those using AI to enhance their services, not replace the human element.”
Megan Eighteen, President, ARLA Propertymark
Analysts comment the moves reflect growing investor anxiety that AI tools may squeeze margins in service-led industries. The Telegraph reports that estate agency is increasingly being grouped with wealth management and other advisory sectors seen as especially vulnerable to digital disruption.
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