Shares in major property companies declined last week as part of a broader market sell-off driven by investor concerns about artificial intelligence’s potential impact on service-led industries.
Savills’ shares fell 7.5% in London trading, while International Workplace Group, which operates Regus, dropped 9%. British Land and Landsec declined 2.6% and 2.4% respectively.
US market experiences sharper declines
The sell-off was more pronounced in US markets, where CBRE fell 12.5%, Jones Lang LaSalle declined nearly 11%, and Cushman & Wakefield dropped 9.1% over two trading sessions.
According to analysts, the declines reflect growing investor concern that AI tools could reduce margins in service-intensive sectors. Estate agency is increasingly being grouped alongside wealth management and other advisory industries viewed as potentially vulnerable to digital disruption.
Jade Rahmani, Commercial Real Estate Analyst at Keefe, Bruyette & Woods, told the Guardian that investors were withdrawing from “high-fee, labour-intensive business models viewed as potentially vulnerable to AI-driven disruption”. However, Rahmani added that “the sell-off may overstate the immediate risk to complex deal-making, even as the long-term AI impact remains a ‘wait-and-see'”.
Industry response
Megan Eighteen, President of ARLA Propertymark, told The Telegraph that AI is “changing the landscape” for property companies.
“A lot of the tasks that traditionally justified fees, such as valuations, marketing copy, and enquiry handling, can now be automated quickly and efficiently,” Eighteen said. “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.”
Eighteen noted that lettings remains a people-focused business, stating that “compliance, negotiation, tenant quality, and local market insight can’t simply be replicated by an algorithm”. She suggested that agencies using AI to enhance rather than replace human services would be better positioned.
The declines come as investors reassess valuations across sectors where automation could affect traditional fee structures and operational models.
