Technology and real estate: Delivering data to meet investor and regulator demands

Structured data is the new King in Real Estate

Success in the competitive real estate sector demands particularly effective use of data to meet the growing expectations of both investors and regulators.

That’s why data availability remains a top priority for real estate investors, asset managers and property managers. It’s critical to have access to a range of data at speed, not only for investor reporting, but also for making strategic decisions about properties, portfolios, and distributions. In addition, the need for accurate and flexible reporting has become essential in a heavily regulated and increasingly sustainability-focused environment.

While the types of data required today aren’t drastically different from the past—portfolio analysis, regulatory obligations, and performance metrics—the volume, specificity and speed of data delivery have increased dramatically. Modern asset managers need secure online information that delivers actionable insights, rather than traditional data dumps or basic file transfers. On top of this, ESG metrics now play an integral part of this data landscape.

Investor data demands

The demand for swift access to quality, wide-ranging data is largely driven by investors. With the evolution of fintech, apps and online portals, investors now expect data delivered quickly and in near-real-time. The sophistication of data access available today far surpasses what was available even a few years ago.

Institutional investors, in particular, expect detailed information on returns and performance metrics to be accessible electronically, often daily. Meanwhile, other investors may require less frequent updates but still expect tailored delivery, such as quarterly reports.

These varying investor demands highlight the need for flexible, sophisticated data management platforms. Single managed accounts and co-investors, for example, often come with exact reporting requirements, making robust and adaptable systems indispensable.

Technology costs and the rapid advancement of Artificial Intelligence

Technology has become the great enabler of efficient data management, but it comes with significant costs. In the fund administration space, companies often invest more than 20% of their budgets into technology and process automation.

But, the evolution and development of new technologies are moving quickly. Take artificial intelligence (AI), for example, the changes in capabilities in just 12 months is significant. Look at optical character recognition (OCR), a technology that electronically converts typed, handwritten or printed text into a form that a computer can process, edit, display online and store. This has matured significantly, enabling faster and more accurate data digitisation. AI-powered tools now streamline portfolio analysis, automate compliance monitoring and enhance risk assessment. Predictive analytics and scenario modelling are also becoming standard, offering fund managers actionable insights to optimise performance.

Without doubt, AI is rapidly transforming fund administration by enabling smarter decision-making, reducing manual processing and improving data accuracy. As a result, fund managers must now carefully evaluate technology investments to balance short-term costs with long-term benefits, particularly as AI and machine learning are evolving at pace. 

Given the complexity, the vast number of technology providers available in the market, and significant costs linked to it, fund managers are increasingly likely to turn to third-party providers for fund administration. The ability to navigate this intricate landscape, integrate multiple technologies seamlessly, and ensure compliance with evolving regulatory standards will become an even more compelling reason to outsource these services. And this trend is set to grow as fund managers prioritise efficiency, scalability and access to specialised expertise.

Regulatory pressures

For most, the biggest issue and reason for adopting and investing in technology is the amount of regulatory change, and the impact this has had on their businesses. For example:

• ESG regulations: The EU’s Corporate Sustainability Reporting Directive (CSRD) and Sustainable Finance Disclosure Regulation (SFDR) have introduced stringent requirements for ESG reporting. Real estate managers must now disclose metrics related to energy efficiency, carbon emissions, and other sustainability factors.
• Compliance standards: Anti-money laundering (AML) laws and know-your-customer (KYC) regulations continue to demand rigorous data collection and validation processes. Companies are now required to demonstrate compliance with these regulations in real time. That these standards are not fully aligned between the EU and for instance the US, often results in frustration between the various stakeholders.
• Harmonisation of global standards: Organisations like the International Sustainability Standards Board (ISSB) are pushing for global consistency in ESG and financial reporting, adding another layer of complexity for fund managers.

Regulatory demands necessitate sophisticated reporting capabilities. Platforms must now handle multi-jurisdictional compliance seamlessly while integrating ESG metrics, which are increasingly a prerequisite for attracting institutional investors.

The way forward

It’s clear that to effectively navigate today’s regulatory and investment landscape managers need robust technology and strategic outsourcing. But, finding the right technology partner can be challenging. 

Here are key questions asset managers should ask when evaluating technology platforms:

• Can I quickly see all my investments and legal entities in my real estate investment portfolio?
• Can I track related statutory requirements across jurisdictions, including outstanding and fulfilled deadlines?
• Is the platform flexible enough to accommodate new or changed regulatory requirements and investor demands?
• Can I respond promptly to investors, regulators, and auditors demanding fund information?
• Does the platform enable secure data sharing in the required formats, beyond email or regular mail?
• Can I securely store and manage documents throughout the fund lifecycle, from KYC onboarding, transactional documents to liquidation?

The future

Looking ahead, several trends will continue shaping the real estate fund administration landscape:

1. ESG integration: ESG metrics will become a default requirement for investor reporting, especially as the real estate sector seeks to address its significant carbon footprint.
2. Technology innovations: Blockchain, predictive analytics, and AI will further enhance transparency, security, and decision-making capabilities.
3. Data privacy and security: Heightened data protection regulations, such as GDPR and the CCPA, will require administrators to adopt advanced cybersecurity measures like zero-trust architecture.
4. Market volatility: Rising interest rates and economic uncertainty will drive demand for agile, tech-enabled fund administrators capable of stress-testing portfolios and optimising returns.

For firms that are able to embrace innovation and adapt to the evolving landscape - or reach out to fund solution providers that can support them - the opportunities to succeed in the real estate sector are immense.