1 Apr 2025
At PMG’s 2025 Outlook Series, industry leaders discussed the key challenges and opportunities shaping the future of commercial real estate (CRE). One thing was clear: the industry is moving fast. Automation, AI, and sustainability are no longer emerging trends; they’re fundamental to how buildings are designed, managed and valued.
The demand for flexible, efficient, and technology-enabled spaces is only growing, and those who invest in these areas now will lead the way.
Automation and AI-powered tools are making buildings more efficient and responsive to tenant needs. The technology is already delivering real results:
- Proactive maintenance and energy savings – AI-driven systems like Airmaster’s Intelligent Maintenance (IM) can now detect issues before they become costly problems. By predicting when equipment will need repairs and optimising energy use, landlords and property managers are reducing costs and improving building performance.
- Data-driven decision making – Owners and occupiers are relying on better data to make smarter leasing and investment decisions. Technology like the 7NOX app enables real-time tracking of building usage and energy consumption, helping identify inefficiencies and drive improvements. At 152 Fanshawe Street, PMG Funds used 7NOX to tackle inaccurate after-hours HVAC reporting and outdated systems, resulting in a 38% reduction in after-hours energy usage and an uplift in the building’s NABERS rating to 5.5 stars.
Sustainability is no longer a “nice to have” in commercial real estate; it’s an expectation. Investors, tenants and governments are all pushing for buildings that are more energy-efficient, carbon-neutral and resilient for the long term.
Sustainable innovation in construction, such as mass timber, is also gaining traction. Stockholm, for example, is planning to build the world’s largest wooden city, setting a new benchmark for sustainable urban development.
New Zealand is embracing similar construction practices, with notable projects setting benchmarks in the industry. For instance, Tauranga City Council's new administration hub is poised to become the country's largest mass timber office building, spanning over 10,000 square metres.
Similarly, PMG recently acquired an innovative base-isolated building in Wellington - a good example of future-proofed sustainable commercial real estate that enhances both safety and long-term asset value. We also manage several properties with NABERSNZ ratings of 4 to 5.5 stars, reflecting best-in-class energy efficiency and operational sustainability.
These initiatives reflect a broader industry trend towards integrating sustainable practices and innovative technologies in commercial real estate. For owners, they help enhance operational efficiency, environmental responsibility and long-term sustainability and value of properties. For tenants, it enhances the spaces that they work in and support their businesses by lowering operating costs, promoting flexible working and employee wellbeing, and aligning with their own ESG goals.
While the operational benefits are plenty, it also supports access to sustainability-linked loans (SLLs) facilitate and support the key role that credit markets can play in funding and encouraging borrowers to contribute to sustainability
Technology and sustainability will continue to shape commercial real estate in the years ahead. Smarter buildings mean lower costs, better efficiency, and a stronger competitive edge for investors and landlords who embrace these changes.
As businesses seek high-quality, flexible, and energy-efficient spaces, those who invest in smart, sustainable real estate will be best placed to meet future demand.
Disclaimer: The information in this blog is general and current as of April 2025. It is not intended as regulated financial advice under the Financial Markets Conduct Act 2013 and does not consider your specific circumstances. PMG does not provide financial advice. Please consult a licensed financial advisor before making investment decisions.
