Streamlining CRE with FinTech: Tackling rising insurance costs with data-driven solutions 

At JLL Spark, we focus on making impactful investments in technology that reshape the real estate industry. A key pillar in our investment thesis is the inevitable intersection of FinTech and commercial real estate (CRE). Much like our peers in banking and financial services who have greatly benefited from decades of FinTech innovation, we firmly believe that CRE will follow a similar transformation through PropTech innovation. We are actively looking to invest in solutions that are helping streamline CRE transactions, optimize asset management, and democratize investment. One example is our recent investment in Sertis, a tech enabled insurance brokerage that is changing the way property and casualty insurance is underwritten. 

Why Sertis? 

Developing accurate underwriting models for parametric insurance in CRE is an actuarial challenge. Traditional insurance relies on historical claims data and actuarial science to predict future risks. However, parametric insurance requires a new framework that effectively correlates specific parameters with losses — a connection that hasn’t yet been sufficiently established in CRE contexts. 

Enter Sertis, a company at the crossroads of InsurTech and PropTech, that aims to revolutionize how property insurance is priced by leveraging detailed property management and underlying risk data. Sertis teams up with property management platforms to create a digital suite of tools designed to offer more accurate, asset-level insurance pricing based on building management data. Sertis operates as a licensed managing general agent (MGA) that uses proprietary risk assessment technology to more accurately underwrite and sell insurance policies for assets that are managed diligently. 

The Problem 

Property and casualty insurance costs have been a significant and growing expense for asset owners. According to a recent study published by the National Multifamily Housing Council (NMHC) alongside NDP Analytics, a staggering 51% of property owners expect commercial property insurance rates to see annual increases of at least 30%. Several factors contribute to this spike in premiums, such as inflation, climate risk, and the adjustment of previously underreported total insured values. However, the insurance industry has traditionally lacked the tools to price risk effectively at the asset level, often relying on regional data to set prices on a per square foot and per unit basis. 

The Solution 

Sertis’ platform uses comprehensive property management data to generate a Loss Run Indicator (LRI) score for each property. This score allows insurers to determine premiums that reflect the actual risk levels of well-managed assets, potentially rewarding property owners with cheaper premiums while still maintaining insurer margins. By applying advanced data analytics, Sertis provides a much-needed mechanism to assess and price risk more precisely, offering a win-win situation for both asset owners and insurers. With continuous advancements in AI and data science, the future of commercial property insurance looks set to pivot towards more tailored and equitable pricing structures, easing the financial burden on asset owners. 

Leveraging Expertise for the Commercial Sector 

Our strategic investment with Sertis presents a unique opportunity for JLL to enhance its property and asset management offering for CRE owners. Through a collaboration with Building Engines, a JLL company, we are working to develop a more precise risk profile for properties, which can lead to better-informed decisions regarding insurance coverage. This Commercial LRI score will leverage JLL’s sheer volume of proprietary data to better understand risk profiles for JLL managed assets, ultimately leading to reduced insurance premiums at scale. As the costs of owning a building rise, JLL, along with its startup portfolio, will be there to help our clients get the most from their assets. 

Written by Daniel Correa, Growth Principal at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Who benefits when the CRE transactions market recovers? 

Since March 2022, central banks, led by the Federal Reserve, have aggressively raised interest rates to combat rising inflation. This has caused significant disruption in the real estate sector. However, towards the end of 2023, central banks’ efforts to curb inflation started showing progress, leading investors to believe that interest rates have reached their peak. Stable and predictable interest rates are crucial for improving market activity, as they bring back predictability to debt costs. As inflation continues to ease and the timing of policy rate reductions becomes clearer, the momentum in the commercial real estate (CRE) market is expected to build, with the second half of 2024 and 2025 being potentially transformative. This presents an opportune time for industry participants to embrace new technologies offered by the thriving PropTech sector. In this post, we explore three key areas where we believe PropTech will assist CRE in taking advantage of the changing market: 

Land Data: Capital Market teams benefit from centralized land data to accelerate deal sourcing and transactions times. Developers and brokers require detailed data for each market they operate, to pencil out projects effectively, and to drive more value to clients. LandTech is a JLL Spark portfolio company that delivers a digital solution, providing real-time data and analytics for property developers and investors. The platform offers insights into planning applications, site analysis, and financial modeling, enabling users to assess the feasibility of potential development projects accurately. The investment in LandTech allows JLL’s clients and employees to more quickly deliver informed decision-making and enhance investment strategies in the real estate development sector. 

Prospecting Technologies: The introduction of AI in commercial real estate (CRE) leasing promises to transform how brokers approach point-of-sale strategies. Solutions like qbiq offer virtual tours and interactive presentations, enhance the leasing experience by providing immersive and dynamic showcases of properties. By harnessing the power of AI, CRE leasing brokers can enhance their efficiency, attract more tenants, and optimize their leasing strategies. With Ren Systems, brokers can automate prospect management, track leads, and manage deal pipelines more efficiently, freeing up time for client interactions and business development activities. These solutions empower brokers with state-of-the-art technologies to increase their close rate. 

Streamline Processes to Improve Productivity: The application of AI can also revolutionize the real estate capital markets sector (among others) by streamlining processes and reducing costs. Through AI-powered tools, tasks that previously consumed significant time and resources can now be automated, especially those that are document-centric. JLL Spark is seeking technologies that can, for example, automate (or partly automate) valuation and risk advisory report creation by leveraging AI to drive cost savings, improve profitability and empower professionals to focus on higher-value activities. 

The slowdown in the CRE transactions market has created a prime opportunity to trial new technologies. Brokers are seeking new ways to differentiate themselves in an incredibly competitive market. Developers are looking to better control project costs. Capital markets players want to access the long tail of investors. The list goes on. Technology solutions that prove to help the industry be more productive, more efficient, and impress clients across the life cycle of a development, the management of assets, or a transaction are now seeing incredible adoption. At JLL Spark, we are eager to invest in these best-in-class solutions as we continue to look for technologies that can deliver a competitive edge. 

Written by Danny Klein, VP of Innovation at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Breaking free from the binary ‘Home vs. Corporate’ office paradigm

Continuing our blog post series on the Future of Work, we’ve touched on the importance of technology in shaping the future of work, how leaders can adapt to the ‘new normal” and how workplace managers can stay relevant by leveraging digital solutions to differentiate office spaces and meet the evolving needs of workers. We also discussed our vision challenging the traditional notion of the office as the only solution for achieving organizational goals and explored alternative ways to create great teams and achieve collaboration thanks to new technologies (video conferencing portals, tenant apps, mobile access credentials across entire portfolios etc.), to create the right environment for teams to thrive. 

For office workers, hybrid is no fad, but a widely accepted fact of life, with only a few exceptions. To attract and retain talent, and to provide a ‘modern’ workplace experience with maximum productivity, we think that employers will progressively break away from the binary system of either work from home, or from the office. There are three key factors driving change in corporate real estate management: 

  1. The global distribution of teams 
  1. The need to sometimes recruit the best talent for the job regardless of their location near a corporate HQ 
  1. To operate in a more agile and cost-effective way  

At JLL Spark, we believe that organizations will increasingly use third party coworking spaces under this new paradigm and supplement their corporate HQs with flex contracts and ‘workspaces on demand’ (like 50 permanent desks in a coworking space) to manage overflow and provide more flexibility to employees.  

This is why we invested in Desana, a leading global PropTech company that offers corporate real estate teams the ability to centralize, manage, and pay for all their flex space bookings, including workspace on demand for their global employees. 

With Desana, portfolios can be right sized within minutes, not months. Their application enables corporations to scale their real estate quickly and cost effectively as demand shifts. For instance, what if you could provide workspace on demand for six to 12 months in that new market you are about to open? Based on the granular utilization data that Desana provides, you could then see the area with the most bookings, the actual volumes (number of bookings for desks and meeting rooms) and find just the right office lease. 

What if you wanted to book event space once a month for large client events (50+ attendees), but don’t have enough space in your office? Desana’s got you covered.  

The best profile for that important job vacancy isn’t near one of your corporate locations? No problem, that employee will be able to book quality office space through the application. 

As discussed in our previous post, combining Desana with other technologies can really help corporations to take the future of work in their own hands and provide more productive, happier, and engaged employees, while reducing costs and CO2 emissions due to more efficiencies.  

At JLL Spark, our investments in the Future of Work are based on our client’s technology needs for added flexibility and efficiencies in their workspace strategies. Whether you are a PropTech entrepreneur, a corporate end user, or a JLL colleague, we encourage you to come partner with us in our mission to bring best in class solutions to the ecosystem.

Written by Arnaud Bouzinac, Growth Principal at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Questioning the unquestionable: Building PropTech infrastructure for the hybrid future of work 

Curioser and curioser. Alice’s description of the rabbit hole leading to Wonderland is an apt commentary of the return to office/work from home situation that we find ourselves in. Four years on from the start of the pandemic, we are in a type of wonderland where we are all wondering what the future of work looks like. 

From first principles, organizations want to thrive. Part of building an organization that will be successful is the culture you build, as well as having teams working together to meet objectives and serve customers. Until 2020, it was unquestioned that, particularly for knowledge workers, that would all happen in an office, or a set of offices. Post 2020, we need to understand if that is the best and only solution across all use cases. 

As investors in PropTech, we should be questioning the unquestionable in search of better solutions and superior returns. So, let’s imagine that while organizations have the same goals as before, there are other ways to reach those objectives, that don’t require all of us to be in the office at the same time every day of the work week. 

To create, sell, and maintain insanely good products and services that profitably scale at attractive price points, you need great teams that innovate rapidly and collaborate appropriately. If they are not all in the office all the time, how do you achieve that? Likely not via vanilla video conferencing that provokes fatigue, crosstalk, and inhibits free flowing discussion (the sort that is valuable when ideating for example). 

That’s why we invested in Noro (fka Shared Studios). Their large format portal allows free flowing conversation between people in each room, with a lifelike presence for seamless interactions. If like me you like to pace around, whiteboard, and wave your hands as you think, Noro’s got your back. And if you are someone in professional services, constantly on the road, Noro allows you to conduct more meetings more effectively, without the associated carbon footprint. 

Combine Noro’s solution with, say, Desana for flex office space, HqO to maximize the experience when you are in the office, SwiftConnect to get you in and out of all of your organization’s offices wherever you go by waving your smartphone, and VergeSense to deliver Occupancy intelligence, we believe you have the beginning of a tech stack that can help you deliver the right environment for your teams, and your company, to flourish, no matter how far down the rabbit hole we go. 

Written by Raj Singh, Managing Partner at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

The future is now: How technology is shaping the way we work

The past three years have arguably made the commercial world more connected than the previous hundred combined. The COVID-19 pandemic has forever changed the way we work, unlocking the ability to work from anywhere and redefining the employer/employee dynamic. At JLL Spark Global Ventures, we are fascinated by the evolution of the workplace and the role of technology in shaping the future of work. In this post, we offer some thoughts for how leaders can adjust to the new normal and how building owners can leverage technology to stay relevant.  

In 1926, Henry Ford introduced the five-day work week, and though it was a reduction from the six-day norm, it led to higher productivity and better business performance. Today, as we navigate the transition to remote and hybrid work, we see similar patterns. While remote work offers benefits like eliminating commute times and improving work-life balance, it has also brought challenges like lack of accountability and cultural decay. It has since become increasingly clear that the world is too complex for a single model to succeed, like it did in Ford’s time. Consequently, we must continue to adapt the way we work to meet the needs of our evolving business landscape and doing so will require behavioral and structural changes. Thankfully, we have technology.  

Let’s focus first on how employers can drive employee experience. Not every business needs a large, full-time in-person workforce to be successful, but how do leaders identify the right balance for their business? The foundation must be built on data. Leaders must first understand how each individual works, process the matrices of how their teams work, and create a real estate strategy that melds with those answers. They must then foster a workplace that unlocks team performance, either through collaboration opportunities or infrastructure and amenities that bolster focus. Platforms like Offi, VergeSense, and Desana provide insights on workspace utilization, while employee experience and team analytics platforms like HqO and Visier help maximize organizational performance. As organizations expand, balancing the needs of a connected workforce with the realities and pressures of cost and travel-related carbon footprints becomes a challenge. This is where our portfolio company, Shared Studios (aka Noro in the CRE space), is charting new territory… more to come on this in our next blog post.  

For owners and operators, the challenge lies in differentiating office spaces in a market with excess supply. Here lies an implicit opportunity for lasting differentiation: owners and operators can capture strong demand by making their spaces appear bespoke for every tenant and building the operational structure to meet their needs. This is only feasible through technology. We view the owner/operator workflow as three broad buckets – marketing, leasing, and ongoing operations; below we have provided some technology suggestions across each. On the marketing side, owners must realize each tenant’s needs are unique; a law firm, gaming company, and talent agency each need different elements in their space and want an owner who appreciates that nuance. This is where our investment, qbiq, fits in by leveraging historical market data and generative AI to generate photo-realistic renders and 3D walkthroughs of an owner’s space, specifically designed for a prospect’s needs. In the leasing workflow, market data and lease abstraction platforms like Costar, Docugami, and Docjuris aid in pricing and contracting spaces and then provide a data bridge to your operations. Embedding each tenant’s requirements in a property and asset management platform, for example Re-leased or Yardi, and operating platform, such as JLL’s BuildingEngines, is step one, but owners must then link each of their tenant amenities and offerings to their operating system to convert tenant needs into work orders. The best owners will layer AI and automation on top of these processes to immediately action on low-acuity tasks, reduce operational bottlenecks, and even optimize energy-related costs and emissions. 

In a few short years, the working world has changed dramatically, leaving employers and office owners scrambling to meet its evolving needs. Technology helps; however, technology alone is not the answer.  Leaders must deeply understand their business, design workspaces that support their goals, and effectively communicate the intent of these designs to their teams. They must also actively measure and update metrics to monitor the impact on performance and employee morale. Owners must be agile and build robust operational workflows to meet tenants’ changing needs.  

JLL and JLL Spark are on a mission to enable this new paradigm. If you are building technologies that help leaders and owners create and adapt to the new future, we’d love to hear from you. 

Written by Ajey Kaushal, Investment Principal at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

From brown to green: How JLL’s technology investments help our clients achieve their net zero goals  

JLL Research recently published “The green tipping point” exploring the growing importance of sustainability in the real estate industry. Increasing demand for sustainable buildings from tenants, investors, and regulators is leading to a shift toward greener practices and technologies across the real estate industry. Rising tenant expectations (especially from corporates who need to meet their sustainability targets), investor/lender focus on sustainability, regulatory pressures, cost savings and the prioritization of health and well-being are all leading to higher demand for low carbon buildings, and a need to decarbonize the existing building stock.   

As a leader in commercial real estate, JLL recognizes the importance of decarbonizing buildings to mitigate climate change and align with sustainable development goals. Our sustainability consulting business works with the largest real estate investors and occupiers to help them meet their sustainability goals. To support these efforts, JLL has made strategic investments in technology solutions to advance our client’s decarbonization pathways. Here’s how JLL’s investments in Carbon Pathfinder, JLL Canopy, JLL Hank, Turntide Motors, and ecoworks are helping to achieve this goal: 

Carbon Pathfinder: JLL’s Carbon Pathfinder is a proprietary tool that enables clients to identify and prioritize energy savings opportunities within their real estate portfolios. Planning the carbon pathway is the first step decarbonizing a portfolio. Carbon Pathfinder helps determine the most effective strategies for reducing energy consumption and greenhouse gas emissions, while also prioritizing return on investment, and avoiding stranded assets.  

JLL Canopy: JLL Canopy is a sustainability platform that helps clients to collect, measure, manage, and report on the environmental performance of their buildings. It provides real-time data and actionable insights to assess sustainability goals, track progress, and identify areas for improvement. By integrating energy, water, waste, and carbon reporting, JLL Canopy enables clients to make informed decisions that drive decarbonization efforts. 

JLL Hank: JLL Hank leverages the power of artificial intelligence (AI) to autonomously optimize the management of systems of commercial buildings to deliver increases comfort, air quality, and energy savings. Hank plugs into the existing BMS and creates a digital twin that it then combines with occupancy and usage data to more efficiently manage energy and HVAC systems in buildings.   

Turntide Motors: JLL Spark has invested in Turntide Motors, a company specializing in electric motor technology. By replacing traditional motors with Turntide’s smart, energy-efficient motors, Turntide helps reduce energy consumption in buildings. This technology upgrade provides significant energy savings for HVAC systems, fans, pumps and other building equipment, contributing to overall decarbonization efforts. An investment in Turntide motors can have a payback period of under two years, generating a very high return on investment. 

ecoworks: JLL’s investment in ecoworks demonstrates its commitment to advancing sustainability in the construction industry. ecoworks serial renovation can take a very inefficient building and bring it to carbon neutrality in just a few weeks. ecoworks does this by installing new walls and windows over the old walls, upgrading the roof, adding solar power, and replacing oil and gas heating with heat pumps.  Tenants can remain in the building while the renovation occurs. ecoworks also generates a high ROI for investors.   

Through these and other investments, JLL aims to drive innovation, promote sustainability and address the challenges of climate change in the built environment. In the coming months and years JLL Spark will make new sustainability investments that will provide further innovation for our clients and enhance our ability to help our clients decarbonize their portfolios. By leveraging technology, data, and industry expertise, JLL is actively helping clients decarbonize their buildings, reduce energy consumption, and achieve their sustainability goals. 

Written by Sean Wright, Investment Principal at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Asia Pacific – part 2: Distinctive real estate trends and PropTech VC activity 

We recently explored the real estate industry in Asia Pacific and why it offers vast potential for Proptech solutions. Now we look at the some of the PropTech adoption trends and why there seems to be a lower volume of VC investment compared to the US and Europe. JLL’s Global Real Estate Outlook 2024 highlights several global trends where Asia Pacific differs from other regions, such as sustainability, technology consumption, and PropTech investment. 


In Asia Pacific, there is a growing focus on low-carbon office space. This emphasis on sustainability has resulted in demand for 4.6 million sq ft of low-carbon offices, which is slightly lower than the U.S. demand of 7.1 million sq ft. Interestingly, the supply of low-carbon offices in the Asia Pacific region has already met 41% of this demand, demonstrating a significant commitment to sustainable practices. In comparison, the United States has only managed to fulfill 25% of its demand for low-carbon office space. 

This variance in unmet demand could be due to stricter sustainability standards in many countries across the Asia Pacific region as noted in JLL’s recent real estate outlook. These policies have fostered a higher level of integration of sustainability measures into new building developments. Rapid urbanization in many Asia Pacific cities has provided an opportunity to integrate sustainability from the ground up, resulting in a higher adoption rate of technologies that enable more sustainable building operations. In many cases, large established developers and technology firms are building new technology solutions themselves, resulting in fewer venture capital investment opportunities. 

Technology appetite 

The 2023 JLL technology survey features questions on the appetite for technology spend and the confidence in technology as a competitive advantage. The results showed that these figures in Asia Pacific are very close to the U.S. results. Some results are even higher than the U.S. – for example 100% of occupiers surveyed in both Japan and India believed that technology would provide competitive advantage. Similarly, in all Asia Pacific countries surveyed, over 90% agreed they were willing to pay a premium for tech-enabled spaces. This can be attributed to post-pandemic return to office rates being significantly higher in Asia Pacific with an average of 85%, compared to 75% in Europe and 55% in the U.S. 

PropTech investment landscape 

The U.S. has a large volume of investment and venture capital firms, and an accompanying ecosystem that thrives on the network effect. These ecosystems also exist in Asia Pacific, but there are many more of them, spread across many different countries, and so more dispersed without a single lens across the whole region. 

Investing in Asia Pacific is also more fragmented. For an investor to assess the potential of a startup in any country, there is a layer of knowledge required to conduct effective due diligence, including an understanding of: 

• Product-market fit against local market expectations and business norms 
• Local competitive landscape 
• Cultural nuances that will influence adoption 

This results in what some would see as a disjointed investment market, as well as a localised success rate. Any given product category could have numerous market leaders across multiple countries and even within the regions of that country. There may be an identical product in the country next door, but they are not competitors, because they are tailored to the local market and culture. 

Despite the hurdle of navigating cultural and country nuances, venture capital investments are gaining traction in the APAC region. Local and international VCs, including the JLL Spark investor team, are taking notice of the tech appetite in the region, partially fuelled by the global responsibility of lowering the industry’s carbon footprint. 

At JLL Spark, we leverage the local knowledge of our JLL business teams on the ground. We have subject matter experts who run local innovation teams and can test local solutions even before they are ready for investment. There is a solid stream of new products coming through and plenty of opportunity for new successful PropTech investment in Asia Pacific; this is the tip of the iceberg! 

Written by Carolyn Trickett, Growth Principal at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

Spark X: Pioneering the future of corporate venture studios with JLL  


Welcome to Spark X. Founded in 2021, Spark X is the embodiment of innovation and strategic growth within the JLL family. Where JLL Spark Global Ventures excels in identifying and investing in groundbreaking startups, Spark X takes a hands-on approach, building transformative solutions from the ground up. Through our unique focus on solving big problems, building superior solutions, and targeting expansive growth markets, Spark X is not just about investing in the future; it’s about building the future. 

How Spark X works: Criteria for innovation 

At Spark X, our methodology is grounded in three fundamental criteria: identifying substantial opportunities or problems for JLL, crafting solutions that surpass market offerings, and ensuring these solutions have the potential to grow into billion-dollar companies. Spark X is best suited for technology surface areas adjacent to the core business where we see the potential for both product value and equity value. This approach is exemplified by the inception story of Amazon Web Services (AWS), a venture that transformed a significant internal challenge into a global powerhouse, contributing to half of Amazon’s trillion-dollar valuation. Similarly, Spark X seeks to uncover and capitalize on such transformative opportunities within and beyond the realm of real estate. 

Our process: Identifying and building solutions 

Our journey begins with deep dives into JLL’s operations and businesses, identifying areas ripe for innovation, from streamlining processes to tapping into underserved markets. Spark X explores, validates, and builds from scratch. This hands-on approach allows us to address JLL’s challenges directly. 

The Spark X team: Builders at heart 

Our team is our backbone — a diverse mix of founders, product engineers, and market specialists with proven track records in creating and scaling successful ventures. Our team’s expertise spans FinTech, SaaS, and consumer technology, ensuring a rich foundation for fostering innovation and driving growth. 

Maximizing vendor relationships and building for scale 

Leveraging JLL’s extensive vendor network and focusing on operational efficiencies and employee satisfaction, Spark X has initiated ventures like Mesa and Caltana to enhance vendor payment processes, and Navable and to improve employee onboarding and retention. These initiatives underscore our commitment to enhancing the ecosystem for both JLL and its partners. 

Funding: A strategic approach 

Spark X benefits from the agility of a startup with the backing of a substantial investment pool funded by JLL. This unique position allows us to support our ventures with strategic investments, fueling ambitious projects without tapping into JLL’s core operational resources. 

Looking ahead: Areas for future exploration 

Moving forward, Spark X is keenly focused on exploring areas where technology can dramatically increase productivity, enhance operational efficiency, and drive significant cost savings. By developing platforms that not only improve but also expand access to JLL’s services, we aim to create a more efficient, cost-effective, and forward-thinking ecosystem. 


Spark X embodies JLL’s commitment to innovation, leveraging the corporation’s resources, market presence, and industry insights to build ventures that address today’s challenges and tomorrow’s opportunities. As we continue to grow and evolve, Spark X is not just creating companies; we are setting the stage for the next wave of industry leaders, ensuring they are well-equipped to transform the commercial real estate landscape and beyond. 

Written by Dave Feller and Leonard Speiser, Partners at Spark X

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

CVC series, part 6: The future of corporations and startups working together  

One way of thinking about a large corporation is that it’s a startup that became successful. That’s obvious for, say, Google or Meta, but also true for the majority of companies out there. 

But even as a ‘successful startup’, corporations are radically different from the original startup back in the day. Profit and revenue are the drivers of how the business thinks about itself. The company is likely public and has shareholders to look after. And the level of bureaucracy that has accreted around the products provided is something a founder might shudder at. 

So, sourcing new innovation is a non-trivial task, and a main driver for why a successful corporation might take on such an ‘unnatural act’ and launch a CVC. But, as we have explored in part 1, The goal of CVC, and part 2, Achieving financial and strategic returns, of our CVC blog post series, there is a lot of work to be done to make this work well. 

Correctly balancing the needs of employees, shareholders and investors is critical to successfully run a CVC. In order to get it right, you need top level support , aligned processes, investment skills, allocated capital and time, of course, but you have to start with metrics. 

And by metrics I mean: what are the objectives of your investment program and how will you measure against them? Saying you are ‘strategic’ is only the first step – how you determine the level of strategic value delivered is paramount to delivering the business case for the CVC mission. 

And for the rest: 

  • • Top level support and understanding: From the Board on down, does the organization understand the mission, know how to measure it, and support the strategic goals you are trying to solve? Buy-in is critical to achieving your goals as the rest of the organization needs to be motivated to help. 
  • • Process: Do you have an agreed deal process? For example, can you move quickly enough, have market standard terms and help your portfolio companies grow as startups, as well as deliver on the strategic promise that makes a CVC attractive to a revenue-hungry startup? If not, why would a startup take your investment over anyone else (like a financial VC, for example)? 
  • • Investment skills: Can you build the ability to find, invest and manage good startups that add strategic value and return financial success, while avoiding adverse selection issues? The ability to hire and retain talent is one of the hardest areas for CVCs to work with, given the constraints of the corporate parent; and also leads to other factors such as the structure and size of incentives. 
  • • Allocated capital: What is the structure of the capital allocated for investments? Balance sheet, single LP fund, multi-LP fund etc. The permanence of the structure and the incentives that can be layered on (‘carry’, for example) have a large impact on how prospective employees and startups will view you, and the attractiveness of doing business with you. 
  • • And finally, time: Investments in early-stage companies take many years to mature, so the financial benefits could be seven to ten years out. (Worse, the failed investments tend to fail before the good investments pan out, pushing you into the trough of the J curve). Likewise, these companies may not be ready to engage with a large multinational organization like you, so the strategic benefits might not flow for one to two years after an investment.  

So, the benefits are uncertain and far off, and meanwhile the senior management team that approved the CVC’s formation may have turned over before real proof points arrive… All this to say, a long term commitment is required to make it through to the promised land where, if you have been investing well and regularly, you will start to benefit from a stellar reputation (bringing you better deals), demonstrable strategic value (backed by metrics), customers that are happy with the innovation that you bring them, and financial returns that reliably arrive, making even the most hardened CFO crack a smile. 

No one said it would be easy, but getting it right has a huge upside! 

Written by Raj Singh, Managing Partner at JLL Spark

Interested in a strategic partnership with JLL Spark? Apply for an investment here.

The real estate industry in Asia Pacific – part 1, a regional overview 

Venture capital investments in PropTech have been on the rise globally, with increasing deal volumes and funding amounts in all regions. 

We recently featured a blog post on the PropTech landscape in Europe; in this article we now start to explore the Asia Pacific region, how it differs from other parts of the world and how it offers vast potential for PropTech solutions. 

The Asia Pacific region presents a massive market opportunity for PropTech due to its population, rapid urbanization, and increased demand for real estate services. With over 48 countries and a population of over 4.6 billion, there is no question that Asia Pacific is a huge market opportunity. 

According to JLL Research, the commercial buildings in the Asia Pacific region have a total market value exceeding $12 trillion, encompassing more than 260,000 individual properties valued over $10 million each. This presents an intriguing contrast when compared to the United States, which boasts 900,000 buildings with a total market value of approximately $13.5 trillion. 

According to the 2023 Proptech Venture Capital Report by CRETI, the analysis of the top 10 most active PropTech venture markets also revealed some interesting results. The US was by far the most active market, accounting for 56% of the total deal count with 410 deals. India secured the 3rd position with 7% of the deals, while China ranked 8th with 3% and South Korea came in at 9th place with 2%. Collectively, these three Asia Pacific countries represented only 12% of the deal count, while Canada, the UK, and other European markets accounted for the remaining 31%. 

So, with this many people and so much opportunity, why is there a lower volume of PropTech venture capital investment compared to the US and Europe, and what does this mean in terms of PropTech adoption? 

It is not easy to tell the story of PropTech adoption in Asia without first exploring the region itself and how the real estate industry operates in various countries, including major economies like China, Japan, India, Australia, South Korea, and Singapore, as well as smaller nations in Southeast Asia, Oceania, and parts of the Middle East. 

Specifically, the real estate industry in the Asia Pacific region stands out from other regions in several ways: 

  • • Significant and rapid economic growth and increased urbanization over the past few decades has led to a rising middle class, which has spurred sharp demand for residential, commercial, and industrial real estate. 
  • • Asia Pacific is home to more than half of the world’s population, with many extremely densely populated cities, leading to the rapid development of mega-cities and the need for sustainable urban planning.  
  • • The Asia Pacific real estate market offers a wide range of investment opportunities, including emerging markets like China, India, and Vietnam, as well as more established markets like Japan, Australia, and Singapore. 
  • • Different countries have different rules and regulations regarding property ownership, foreign investments, taxation, and land use. 

Understanding the region’s rich tapestry of cultural nuances is essential for business success, as it impacts design preferences, market behaviors, and business practices. Building relationships and adapting to local customs are necessary to facilitate adoption of PropTech in the region, determining which solutions will be successful in which markets. For example, in many of the less developed countries, high availability of a low-cost labour force reduces the urgency to seek technology solutions for labor optimisation and automation of manual tasks. Another example is manufacturing costs. Imported hardware-based solutions face fierce cost competition against locally manufactured and supported solutions.  

These challenges sit alongside big opportunities, however. The enormous volume of construction and urbanisation means that JLL Spark products like OpenSpace have been deployed in multiple Asia Pacific countries, enabling remote monitoring and inspection of development sites at large scale. 

JLL Spark offers PropTech startups valuable access to JLL’s vast industry network of staff and clients. This is especially true in Asia Pacific, where JLL operates in 16 regions with over 46,000 staff – almost half our employee base. This gives us deep and broad understanding of the real estate industry across the region and positions us well to identify the best investment opportunities in the market. 

Written by Carolyn Trickett, Growth Principal at JLL Spark

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