Real estate tech strategies advance AI, workplace and sustainability
Latest JLL research finds over 80% of companies are increasing technology budgets despite a challenging operating environment
CHICAGO, October 18, 2023 – Commercial real estate occupiers are willing to put their money where the tech is, according to new research data from JLL’s 2023 Global Real Estate Technology Survey released today. Ninety-one percent of occupier respondents are willing to pay a premium for tech-enabled space as they look to technology for strategic value and increased revenue. In fact, real estate tech budgets are set to grow faster than investments in headcount, footprint and operating budgets.
JLL’s research finds that sustainability tools will account for the largest share of increases in technology budgets, underscoring the business and regulatory pressures driving the race to net zero. Respondents expect clean energy solutions to have the greatest impact on real estate over the next three years. For example:
Forty-five percent of occupiers plan to adopt energy/emissions management tech in the coming year.
The adoption rate for data science and modeling tools – used to analyze energy use, occupancy and financial costs across buildings and locations – rose 14% from 2022-2023 (up from 26% to 40%).
“Organizations are shifting their tech priorities from cost reduction to strategically improving their business,” said Sharad Rastogi, CEO of Work Dynamics Technology. “Occupiers are looking for technology that helps increase revenue, enhance business decision-making and improve their sustainability metrics. JLL offers data-driven insight solutions such as our new decarbonization software solution, Carbon Pathfinder, to help them make informed, strategic decisions.”
Following sustainability tech, respondents pointed to artificial intelligence (AI) and generative AI as the technologies expected to have the greatest impact on real estate over the next three years. Surprisingly, most conceded limited understanding of AI despite ranking it highly.
“Digital transformation in CRE is now advancing so rapidly that decision-makers are leaning more on technology experts to understand how certain innovations can have a business impact and provide good ROI,” said JLL CTO Yao Morin. “JLL not only provides critical technology implementation counsel, but we’re also continually innovating so that we can deliver a best-in-breed technology portfolio to accompany our expert advice. Just one example is JLL GPT – the industry’s first generative AI large language model – developed so our real estate experts can deliver faster, smarter insights to our clients. We also offer solutions like Hank, powered by IoT and AI modeling, to reduce energy costs to meet client sustainability goals.”
Additionally, JLL’s research found occupier tech priorities are expanding beyond cost reduction and facilitating remote work to include technologies that drive value to their overarching business goals through collaboration, optimizing and enhanced decision-making.
According to the survey:
The focus is shifting from remote working tools to in-office collaboration technology, with adoption rates jumping from 40% to 50% from 2022 to 2023. In fact, the top tech already in place is in-office collaboration technology.
Health and wellbeing tech solutions rose from 25% to 48%.
Platforms to enable consolidated insights (47%) and drive predictive management (43%) are among the top adoption priorities.
Immersive workplace technology, such as virtual reality and augmented reality, is one of the top five technologies companies intend to adopt next (44%).
The JLL 2023 Global Real Estate Technology Survey was conducted by Meridian West during May and June 2023. The 1,006 decision-makers surveyed included over 600 CRE (corporate real estate) leaders at major occupiers and over 400 leaders at real estate investors, landlords and developers. All respondents have responsibility for making or influencing decisions regarding real estate within their organization and senior leadership including department heads, executive management and C-suite level roles. Research respondents are situated in 10 markets globally: Australia, Canada, China, France, Germany, India, Japan, Singapore, the U.K. and the United States.
Among occupiers, 50% of companies employ more than 5,000 people globally. The respondents represent a range of industry sectors including technology, manufacturing, finance, professional services, retail, hospitality and government. Investor respondents are from a variety of operating models including investment managers and private equity, banks, REITs, real estate operating companies and developers. Over 60% of investors represented hold real estate assets under management in excess of $10 billion.
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.8 billion and operations in over 80 countries around the world, our more than 106,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.