JLL Spark China Ventures – PropTech to Enable CRE Innovation in China

In the past decade, China’s tech startup scene has grown rapidly, leading to the disruption of traditional industries in the region, including real estate. The new JLL Spark China Ventures RMB Fund will focus on this market and invest in PropTech startups to enable tech innovation for JLL and our clients in China.  

Our China mission is twofold – to deliver the best of local innovation to JLL and its clients, and to invest and partner with local startups. As the appetite for new technology continues to grow, we are in pursuit of entrepreneurs who are deeply involved in this market. We will bring best-in-class startups from across China to work with our clients, helping them navigate commercial real estate (CRE) and expand their revenue base. 

A common challenge we see among our clients is their need to stay competitive and cut costs. Technological innovation can provide that edge, and JLL Spark is uniquely positioned to help source and develop such new technologies. As a strategic investor, we strive to form true partnerships with startups. In addition to providing capital, we focus on using our CRE expertise, network, and client base to fuel their growth. We are building innovative CRE ecosystems in major markets across the United States, Europe, and Australia, and we are committed to building a PropTech network in China. 

“As part of JLL’s global mission to transform real estate through technology, JLL Spark’s entry into China enables JLL China to capitalize on external innovation in the region,” says Chris Pu, Managing Partner of JLL Spark China Ventures. “We expect to find local PropTech startups to partner with, introducing their solutions to the owners and occupiers among JLL’s China network in cooperation with JLL’s technology division.” 

We are inspired by the unlimited opportunities and possibilities in the Chinese market. China is a world leader in specific technological sectors, such as robotics and computer vision. For instance, China dominates the hardware unicorn space, leveraging its manufacturing superpower and supply chain advantage. We anticipate more innovative hardware applications such as smart devices, robots, and IoTs in the built world. Environmental, social, and governance (ESG) is another prevailing trend and as its development continues to unfold in China, the demand for sustainability in commercial real estate is steadily increasing. We expect to see green buildings become the new normal and are keen to meet startups that share our mission to reach net zero targets. Spark China investments would be categorized in JLL Spark’s investment themes – construction tech, sustainability, financial tech, smart buildings, industrial tech, and the future of work. 

We invest in early-stage startups, providing them with access to JLL’s extensive client roster and global network. JLL Spark’s growth leads enable startups to scale their business within JLL. Through the new JLL Spark China Ventures RMB Fund, we will support our Chinese investor and occupier clients by working alongside local startups to drive innovation in CRE. 

Written by Zhixue Lu, senior manager of strategic initiatives, JLL Technologies

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

2023 PropTech Predictions from the JLL Spark Team

While as VCs we think in longer time frames, the start of the new year does allow us to reflect on our investment themes and how we see the world changing. We hope you enjoy reading our thoughts and look forward to engaging with you throughout 2023. 

-Raj


Disclaimer: The opinions listed on this blog are predictions only and are not intended as investment advice for anyone, including us… 


Ajey Kaushal, Senior Investment Associate 
Based in Los Angeles, CA, covering the U.S.  

Three competing forces will make it financially challenging for investors, owners, and occupiers to adopt PropTech at scale: 

  1. Increased global focus on CRE to reduce carbon footprint 
  1. Reduced demand in non-Class A office space
  1. Lasting impacts from inflationary and market downturn environment


As a result, the PropTech that will separate from the pack will either help owners directly reduce emissions from day one OR create bottom line efficiency from day one. 2023 will not be a favorable year for the adoption of “nice-to-have” technologies. 


Arnaud Bouzinac, Growth Principal 
Based in Paris, France, covering the EMEA region 

In EMEA, climate risks associated with assets will be a rising topic in 2023. Cybersecurity risks will also draw more attention from our clients. Measuring and reporting carbon lifecycles, as well as energy consumption and operation carbon emissions will also be a strong topic, lending to increased interest in low carbon construction. Our startups active in this segment will no doubt see a lot of opportunities in 2023. The challenges the industry is facing in 2022 will continue in 2023 (rising interest rates, inflation, mispricing of assets) but will hopefully soften in 2024. In the meantime, our clients – both investors and occupiers – will be cash strapped. Therefore, we will need to be able to demonstrate clear ROI with our startup solutions. 


Carolyn Trickett, Growth Principal
Based in Sydney, Australia, covering the APAC region 

I’m seeing a significant increase in focus on sustainability tech in the APAC region and I expect this to continue next year in the form of new funds, incubators, and accelerators in many countries. Products are evolving quickly from “measure and monitor” to proactive management of energy usage and building performance. Hybrid and flexible working are also still hot topics, especially the “hub and spoke” model to give employees more options to access an office environment without long commute times. 


Chris Pu, Managing Partner, JLL Spark China Ventures 
Based in Shanghai, China, covering the China market 

  1. The inflationary cycle will depressurize the global economy in 2023, and there is no escape for China as a key player, primarily in cross-border trading. Nevertheless, with the removal of the pandemic lockdown and the addition of stimulus measures, there will be foreseeable tailwinds in business. Streamlining the real estate sector would be priority for China.  
  1. Digital immunity and autonomous systems will be one of the key thematic areas. We will see fewer human driven billion-dollar industries, including CRE. The best autonomous systems will leverage digital twins, generative adversarial AI simulation, and new technology development to create better system resilience and intelligence.  
  1. Entrepreneurs and VCs in China will swell after the investment drought of 2022. With the vibrant entrepreneur community and sufficient dry powder, the recovery of investment activities shall be anticipated after Q123.   



Danny Klein, VP, Innovation 
Based in Boston, MA, with a global innovation remit 

In 2023, PropTech investments in sectors such as Sustainability and the Future of Work will see an outsized infusion of capital, especially in the early to mid-sized rounds. Also, VCs will continue to invest in AI-powered data analytics solutions to generate insight and make data-driven decisions.  

On the client side, the macroeconomic environment will have a short-term impact on strategies for both occupiers and investors who will be focused on cost savings, creating efficiencies, and improving productivity. This might affect new investments in IoT solutions and Smart Building deployments for 1H23, with clients being more selective about the projects they pursue. The macroeconomic environment will also change the workplace dynamic where employees will be asked to go to the office more frequently, thus cementing the value of the physical assets. This will drive the need to have employee experience solutions like touchless physical access control, and asset reservation systems to effectively manage a company’s return-to-office strategies at scale. I expect that clients will accelerate their deployments in 2H23 as the economy recuperates.  


Eddie Carroll, Growth Principal 
Based in Washington, D.C., covering the U.S. 

In 2023, AI will be the most significant commercial real estate industry trend, enabling real estate firms to streamline operations, reduce headcount, and drive better standardization across their portfolios. The use of AI for analytics and building automation systems will continue to evolve, and I expect to see the rise of PropTech startups using advanced language models (ex. GPT-3) for applications such as commercial lease abstraction and market analysis. Additionally, the emergence of “Models as a Service” will allow for more specialized data sets to power AI in the industry. 


Javier Araujo O’Neill, Senior Investment Associate 
Based in New York, NY, covering the U.S. and Latin America regions 

Early-stage technology companies in emerging markets will outperform the developed markets in 2023. Emerging markets tend to have greater inefficiencies, making the technologies they adopt more impactful. This creates inelastic and enduring companies despite any economic headwinds. 


Kitty Sullivan, Investment Principal 
Based in Austin, TX, covering the U.S. 

  1. Employers will accept the reality that the era of “five days in the office” is gone and embrace solutions that help them manage the complexities of a hybrid workforce. Particularly, employers will find that they need tools to help foster communication and strengthen culture across teams and offices. 
  1. The PropTech ecosystem will find more use cases for generative AI across the asset lifecycle. For example, the construction industry will rely on it optimize scheduling, alleviating the acute pain of delays and budget overruns. In brokerage, generative imagery will be leveraged to market the potential of a space, precisely customized to a client’s need and taste.  



Laurent Grill, Investment Partner 
Based in Los Angeles, CA, with a global remit 

The VC ecosystem will continue to invest in the PropTech space at record rates. Valuations will track with the rest of the tech industry (trending down), but simultaneously PropTech will have outsized interest due to the continued tailwinds related to sustainability goals, flex work, and affordable housing. A large portion of unknowns remain around how larger organizations will view hybrid work. We are starting to see more companies bring their employees back into the office which will lead to larger adoption of tools to ease that transition. The adoption of IoT technologies will require a need for cyber security for this new age of smart buildings as well. 


Raj Singh, Managing Partner 
Based in San Francisco, CA 

  1. Conversions from commercial to residential and other uses will be a huge thing. 
  1. Individuals will start tracking their carbon footprint including their residence, workplace, and everything in between, putting pressure on owners and occupiers to deliver accurate data. 
  1. Interest rates will continue to crush several promising developments through most of the year. 
  1. VCs will continue to pour money into sustainability-focused startups and PropTech will benefit from the inflow of cash. 



Sean Wright, Growth Principal 
Based in Frankfurt, Germany, covering the EMEA region 

  1. Commercial real estate prices will continue to fall throughout the year, with a bottom in Q4. Europe will have deeper declines than the U.S., as the ECB will have to raise rates significantly in 2023. 
  1. Sustainability will pick up steam in 2023, becoming the dominant PropTech investment theme, especially in Europe due to extremely high energy costs. 
  1. 2023 is going to feel like a bad year for the economy, and especially the real estate industry, but it will be a great time to put VC money to work. 



Tanguy Quero, Investment Principal 
Based in Paris, France, covering the EMEA region 

  1. All players will adapt their organization and budget to start 2023 in better shape. They will be in a “wait and see” mode during Q1 before deciding to stay on plan, slowdown, or accelerate investments for the rest of the year.  
  1. The trend of insider-led bridge rounds will continue. M&A opportunities will also continue to grow. This will likely be an opportunity for the best financed U.S. startups to start expanding in Europe at a good price.  
  1. In Europe, we will see more Pre-Series A and Series A rounds in sustainability and more VCs interested in investing. However, as regulation is the tail wind for those startups, the slow down of government incentives will be an issue. Energy will continue to be a hot topic, as will asset repurposing and circular economy. 



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

Enhancing Client Service with Data Visibility

At JLL, we see a brighter way through the delivery of our data strategy. That strategy enables business users to make sensible, data-driven decisions in all areas of our business. 

Whether advising clients, managing buildings, or increasing operating efficiencies, we present timely insights to decision-makers through data fusion and analytics. In JLL’s leasing business, we use data to increase customer satisfaction and make brokers more effective. 

At its most fundamental level, leasing requires matching tenants and spaces. A simple view of this matching has two primary dimensions: Timing and Suitability. Timing is intuitive – the tenant and the space must be available simultaneously, or there can’t be a match. The earlier matching candidates are identified, the better. Suitability covers multiple factors, including price, size, location, etc. The greater the alignment on suitability items, the closer to a “perfect” fit and the more satisfied the client. 

Leasing brokers must know their market – including client requirements, property information, and when spaces will be needed or available. Historically, a broker could keep track of this information in their head. Today, clients and markets are more complicated, and the avalanche of available data makes it nearly impossible for a broker to track it all individually.  

JLL uses data and technology to tackle this problem.  

To begin, we collect data from our internal systems about properties and spaces, including their size, price, location, amenities, etc. We also collect the preferences, lease expirations, and needs of our clients. We collect timing data about when spaces will be available from our property owner clients. That’s a lot of data, but there’s more. 

We supplement internal data by adding external sources. Those sources include publicly available information, announcements, socioeconomic data, and data from third-party vendors. 

All that data is brought together into JLL’s Enterprise Data Platform, or EDP. The EDP is a cloud-based, curated data lake developed and operated by JLL Technologies, the division of JLL driving innovation in commercial real estate with tech and digital initiatives. Data visibility is ensured through a data-driven automated tool that we’ve built. Data stewards and researchers further extend and refine the data, making it complete and dependable.   

Once prepped, we perform analytics on the data. The analytics provide our brokers with detailed market information and potential matches. When we first started doing this, the matching was rudimentary. Timing was limited to those spaces that were either open now or very soon. Suitability was limited to minimal attributes such as price and size. 

Over time, we have increased the suitability matching to incorporate more components like walking scores, vehicle and pedestrian traffic volumes, and socioeconomic information. All resulting in better-matched tenants and spaces. The matches are of higher quality and come closer to what tenants consider “perfect.” 

And we aren’t stopping there. We continue to sharpen the algorithms and introduce functionality. Similar to how we have grown the suitability components, we are also expanding capabilities around timing.  

Recently we deployed AI models that predict possible client needs before they are formally announced. The models look for signals in publicly available information and bring likely opportunities to the broker’s attention. This pulls the timing dimension earlier and allows the broker to be in front of prospective tenants sooner, giving all parties a better chance to find the perfect match. 

Results from the analytics show up in two ways. First, brokers can identify and focus on “best fit” tenants, increasing their success and maximizing the return on their efforts. Second, clients are presented with superior matches, reducing the stress of finding an appropriate space and increasing client satisfaction. 

This is just one of the many ways we use data and technology at JLL to enhance real estate services for our clients. 

Written by Michael Norton, Chief Data Architect, JLL Technologies

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

Sustainability Measurement: The Heat is On

On the heels of COP27 and the relative lack of progress towards agreement beyond the loss and damage accord, it’s clear the real estate industry and governments still have a long way to go to deliver on climate change promises. 

Knowing that close to 40% of carbon emissions are related to the built world, we (JLL) have made our own commitments and we are not alone in the industry in doing so. To reach those goals will require the deployment of technology at scale in two areas: 1) the use of buildings and 2) the construction and renovation of buildings. 

Technology in the use of buildings 

Most of today’s existing buildings will still stand in 2050. Given that, the emphasis will be on remediation – the reduction of emissions by improving the sustainability profile of these aging buildings. The first and easiest approach is to reduce energy consumption. At JLL Spark and at our larger divisional home, JLL Technologies, we’ve invested in solutions for energy efficiency: 

• Companies like Turntide Technologies have developed improved motor technology that allows significant reductions in energy use without material changes in activities or habits. Using them in building facilities can deliver up to 50% energy reductions.

• Likewise, the use of ‘central nervous systems’ like Building Engines, coupled with AI control of HVAC systems via Hank, allows for smarter usage without restrictions in terms of comfort or usability.

• Other portfolio companies like VergeSense and Infogrid use IoT sensor tech plus smart software to eliminate unnecessary energy usage, such as lighting, heating, and cleaning unoccupied areas. These efforts, plus the measurement and reduction of water use and waste production will help reduce the environmental impact of the built world. Further efforts will be required at a larger scale than single buildings, however, so expect to see startups addressing smart grids and energy distribution entering the sustainability field sooner rather than later. 

It seems inevitable that changes in behavior and the restriction of certain usage patterns will also be needed, and the ability to measure and control the consumption of energy and resources will play a role as the deadlines for carbon net zero approach, and regulations tighten. 

Technology in the construction or renovation of buildings 

The construction of buildings today is highly carbon intensive, with cement and steel significantly contributing to carbon cost. We expect that regulations will mandate every building to meet strict goals for embodied as well as generated carbon. These may also be accompanied by rules that promote retrofits and the re-use of materials. Therefore, it will be crucial for innovative startups to deliver the commercial and residential buildings of the future, for example: 

• JLL Spark has invested in Juno, a startup pioneering a viable way of creating sustainable communities using mass timber rather than traditional methods. 

Veev is another of our portfolio companies; they have created the ‘Veev System’, a vertically integrated process to deliver turnkey buildings in a near zero waste fabrication plant. 

• Other portfolio companies such as ecoworks deliver retrofits for multifamily buildings with AI-driven targets without disrupting residents. Alice Technologies maximizes the returns of a complex development project at any stage of its life cycle, not just at the start.

Despite the market conditions, sustainable solutions are gaining ground as the industry has clearly understood their importance, especially when it comes to impending regulations and the threat of stranded assets. At JLL Spark, we’re actively looking for the entrepreneurs and startups tackling these issues, so that we can jointly deliver the progress the world deserves from our industry. 

Written by Raj Singh, managing partner

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

Construction Technology: The Need for Optimization 

The construction industry has remained largely unchanged for centuries, with little to no productivity enhancements since the invention of the crane. However, the need for improvement was dramatically realized and accelerated during the COVID-19 pandemic, bringing the industry to an inflection point. Technology is driving change in one of the global economy’s least digitalized industries. According to JLL’s recent report The State of Construction Tech 2020, three years’ worth of construction technology growth and adoption was compressed into the first nine months of the pandemic as the world very quickly sought remote capabilities to prevent disruption in the workplace.  

In the report, JLL identified four categories as “high-impact” on construction technology: digital collaboration, scanning, safety/wearables, and Building Information Modeling/Computer-Aided Design (BIM/CAD). JLL Spark Global Ventures, the corporate venture arm of JLL, has invested in three of the four high impact categories: 

Digital collaboration – INGENIOUS.BUILD enables collaboration amongst the different stakeholders in a construction project’s lifecycle using their unique platform that elevates efficiency and reduces tech spending.  

Scanning – OpenSpace provides customers with a 360-degree visual representation of the construction site that captures and analyzes data.  

BIM/CAD – Alice Technologies is a generative construction simulator, allowing users to rapidly determine the optimal way to build and course-correct a project once underway. 

Even with recent technology advances, JLL Spark continues to identify persistent challenges in construction, including supply chain inefficiencies, lack of digital value capture/exchange, a lack of automation, and elimination of carbon emissions. It is well known that the real estate industry produces almost 40% of the world’s carbon emissions. Finding ways to reduce emissions in new buildings through low carbon alternatives with technology such as carbon sequestration and retrofitting existing buildings over new construction with renovation solutions like ecoworks will require a massive investment and significant adoption to make an impact. The industry will need to create and adopt solutions to reuse materials for the reduction of embodied carbon and to combat the rising cost of supplies. The construction sector has the largest use case for embedded financial products and digital B2B payment infrastructure but has the least penetration; it’s still run by cutting checks. Additionally, the labor market has never been tighter on top of lagging wage growth, making it difficult for construction companies to fill open roles. 

Our CEO Christian Ulbricht signed The Climate Pledge as part of JLL’s commitment to reach net zero carbon emissions by 2040 across all operations. At JLL and JLL Spark, we understand that achieving this ambitious and necessary goal requires significant and immediate investment in technologies that can help bring construction and the entirety of real estate into the modern world. 

Written by Javier Araujo O’Neill, senior investment associate

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

Renovation is Key to Accelerate the Decarbonization of the Built Environment

It’s been said many times, but the number is too stark to ignore: real estate is responsible for over 40% of global carbon emissions annually, resulting from building operations as well as embedded carbon from construction and materials. This percentage spotlights a huge responsibility for the sector to act and transform itself into a carbon neutral industry.  

Besides the obvious need to tackle the climate and environmental challenges, we currently see two main drivers of change for the industry which are regulatory and financial in nature. Indeed, we see increasing regulatory pressure from governments in Europe and the United States to optimize buildings stocks to become net zero carbon, punishing poor energy performance with rental bans, and rewarding green investments with financing options. Financial drivers are mainly felt with clear premiums on green assets and discounts on brown assets.  

These regulations leave little choice to corporate real estate owners and investors, but even so they still face another challenge. Building new structures with modern green standards represents only a tiny fraction of most portfolios while, according to the European Environment Agency, 90% of the existing buildings today will still be there in 2050. In most cases, demolishing and rebuilding produces emissions during the construction process, and this can represent up to 50% of a building’s lifetime emissions. Therefore, it is clear that renovation of existing assets is key to the industry’s path to net zero. But how can this be achieved? 

Thankfully, solutions from visionary entrepreneurs and companies are rising to the occasion. Berlin-based Ecoworks, a serial renovation startup betting on digitization and automated prefabrication to disrupt the traditional model, is one of them.  

Ecoworks was created in 2019, prompted by the fact that 3.4 million housing units in Germany are under threat of rental bans imposed by EU regulations within the next five years, combined with major challenges in the construction industry, specifically increasing costs, labor shortages, and the lack of innovation. The startup is currently focusing on multifamily residential assets in Germany with plans to expand to more asset types and countries by 2025. Ecoworks clients currently include Noratis, Gewobau Erlangen, and other major local players. 

Using deep construction tech, including proprietary planning and building software, automation, and prefabrication, Ecoworks is able to reduce the onsite renovation time from months to weeks and turn brown buildings into truly net zero carbon structures. One of the key advantages of this solution is that tenants can typically remain on the premises, which means no disruption to the life of the building and no interruption of the rental flow for the investor. Other incentives for investors include subsidies from the German government to help cover the renovation costs, a significant reduction in heating costs of up to 60%, as well as rental premiums and asset value premiums of up to 50% post renovation, according to recent estimates from Ecoworks.

In conclusion, it is reassuring to observe that sustainable options do exist to decarbonize the building stock at scale, and that business and financial interests can also be reconciled along the road to net zero carbon, looking at 2050 and beyond. This is essential to foster innovation and collaboration between the public sector, investors, tenants, and entrepreneurs to tackle the decarbonization of the built world. 

Written by Arnaud Bouzinac, growth principal

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

Tech’s Role in the Future of Work

The verdict is in: hybrid work is here to stay. According to JLL’s research report Technology and innovation in the hybrid age, the percentage of employers offering some form of hybrid work option has doubled from 45% pre-pandemic to 89% today. Office-based employees are embracing this flexibility, with over half choosing to go hybrid. Despite hybrid’s massive growth in popularity, adoption of enabling technology is lagging. The report reveals that, on average, companies are only using four of 15 core technologies that underpin the hybrid work transformation. So, what are the implications for the office? And what tech can help owners and occupiers navigate this transition? Let’s dive in!

Portfolio: Rethinking and optimizing footprint

Both owners and occupiers recognize that their real estate footprints and workspaces need to adapt to the evolving needs of their workforce. Technology plays a critical role in answering key questions like “How much space do we really need?” and “How should we optimize layouts for new working patterns?” Granular understanding of space utilization provided by occupancy solutions like VergeSense, has become a must in the decision-making process. Once understood, Saltmine, for example, helps enterprises seamlessly plan, design, and optimize their workplaces. 

Workforce: Setting teams up for success

Due to the adoption of the hub and spoke model, enterprises seek to offer their staff a seamless experience when booking a desk or a meeting room at the office or at a coworking space at any given time. Flex on-demand platforms are solving this globally for companies of all sizes while providing reporting that fuels the portfolio optimization strategy. 

Communication is another domain that needs to be reimagined in a hybrid world. Employers are seeking remedies for Zoom fatigue by turning to “next generation” in-office solutions. Both telecom incumbents and startups are offering more immersive experiences designed to mirror in-person interaction and improve remote teams’ ability to collaborate.  

Workplace: Improving UX to draw tenants and employees back to the office

Employees are now benchmarking working from home and at the office, in the same way as they do for a physical store and an online marketplace when shopping. Technology can help owners to better understand their tenants’ needs and then improve the attractiveness of their office space. The tenant experience platform HqO is doing just that by providing a direct link to any employee, as well as facilitating access to the most desired amenities and services of the building.  

Equally, well-being related services are also in the spotlight. Period products are typically an afterthought in workplace restrooms, much to the dismay of almost half of the workforce, but Aunt Flow is on a mission to change that. It helps occupiers foster a more welcoming, inclusive workplace by providing free vend, environmentally friendly, menstrual care.  

Conclusion

Sustainability and the future of work are two themes within JLL Spark’s investment strategy that will drive much of the technology adoption in the real estate industry in the coming years. Fueled by constant insights from our clients and Work Dynamics teams and further reinforced by this recent report, JLL Spark is looking across the globe at innovative technology companies to help owners and occupiers with navigating and adapting to a still evolving new normal. 

Written by Kitty Sullivan and Tanguy Quero, investment principals

Join our mission to accelerate the digitization of commercial real estate. Apply for investment with JLL Spark.

JLL Spark as Your Strategic Partner

In the world of corporate venture capital, JLL Spark Global Ventures stands out as the leading innovation platform within commercial real estate (CRE). Unique among our peers in both strategy and structure, JLL Spark continues to be a key strategic partner to disruptive PropTech startups.  

How exactly are we different?  

For starters, JLL is our sole capital partner, so we focus on investing in strategically relevant technology to optimize for the needs of the core business. This means that even within the sphere of PropTech, we focus on investing in startups that cater to the more commercial tranche of the real estate asset class. While we may not be the right investor for every kind of PropTech startup, when we do identify technology with what we call the “JLL fit,” we are arguably one of the most valuable venture partners in the industry. 

How do we add value to our portfolio companies? 

Naturally, having JLL as an investor brings real estate credibility to any startup, but we’re committed to going far beyond just providing our portfolio companies with capital. As a truly strategic investor, we provide our startups with access to JLL’s global presence, clients, industry knowledge, and resources. To facilitate this, we’ve built what we call our Growth Team, to work directly with our portfolio companies and provide dedicated tactical support on navigating the nuances of working with a 100,000+ employee organization. During the onboarding process, a Growth team member is appointed to work directly with our portfolio founders to identify and execute a path toward success within JLL. One of our main goals is to develop a mutually beneficial channel partnership between our startups and a pertinent team within the core business. An example of this is Spark’s introduction of OpenSpace to our Project & Development Services business (PDS) where we leverage site documentation technology to drive efficiency and transparency in our construction project management practice. 

Why should PropTech startups partner with JLL Spark? 

With JLL’s foundation dating back to the late 1700s, today we operate as a leading real estate professional services firm and investment manager across more than 90 countries. The Spark fund is part of our continuing commitment to innovation, leveraging our particularly favorable position to scale the adoption of disruptive technologies in our industry. This presents a massive growth opportunity for current and future portfolio companies, often helping refine a startup’s go-to-market strategy. This is certainly the case with Infogrid’s partnership with our integrated facilities management (IFM) service line, where we’re implementing smart building/IoT deployments to create a data-driven approach to facilities maintenance. 

At JLL Spark, we’re dedicated to investing and growing best in class tech startups that drive CRE lifecycle innovation. Our mission as a strategic partner is to be a bridge between emerging PropTech startups and the multitude of stakeholders within CRE. To date, our strategic investments have granted JLL the ability to provide innovative products to real estate owners and operators. Notable instances of this include JLLT’s strategic partnership with HqO as our preferred workplace experience platform, and our use of Saltmine’s cloud-based platform for dynamic workplace design. This kind of synergy is what we strive towards; delivering value to our clients and driving growth for our startups. 

Written by Daniel Correa, growth associate

Interested in a strategic partnership with JLL Spark Global Ventures? Apply here.

Trending Now in CRE: Sustainability

The sustainability movement is growing across practically every sector in technology. Since real estate is responsible for nearly 40% of global CO2 emissions, it’s no surprise that the built world is focused on sustainability and climate action. However, curbing carbon emissions in our industry will require unprecedented cooperation between owners and tenants. Owners will need to create sustainable spaces for their tenants and establish systems to optimize comfort and minimize climate impact, while tenants must adjust their behaviors and leverage their building’s investments in technology to limit their own carbon footprints.  

To accelerate change, regulators are increasingly implementing climate requirements to penalize slow movers. Lenders and underwriters are requiring stringent climate disclosures, and investors are demanding corporations lower carbon footprints, prompting unparalleled demand for sustainable occupancy. At JLL Spark, we have prioritized our efforts to identify and invest in the leading technological solutions that tackle our industry’s largest challenge.  

While there are many areas to drive increased sustainability in the built world, let’s start with a macro focus on the three core stages of the built world lifecycle: construction, occupancy, and demolition/disposal. While building operations are a major contributor to an asset’s environmental footprint, building materials and the construction process are also responsible for a significant portion of emissions. We need to address all aspects of the built world’s carbon contribution to reach net zero goals.  

Construction technology (ConTech), equally vital to a decarbonized future, is a key focus in JLL Spark’s thesis. Investments we’ve made include Juno and Veev, which build innovative and sustainable housing developments for fast-growing neighborhoods by reducing the time and cost to build new residences and using materials that increase the longevity of these structures. We’ve also made investments in INGENIOUS.BUILD and ALICE Technologies, which help project managers streamline their paths to build and remediate when adverse events threaten overall cost and timeline agreements. We continue to identify and invest in companies that push the boundaries of sustainable construction practices to ensure we and our clients can limit our collective environmental footprint.  

This takes us to the occupancy of buildings. Many buildings around the world are antiquated; built and embedded with technology equally as archaic. Therefore, we need to optimize building systems and insert today’s technological efficiencies within existing structures, which is why we’ve invested in Infogrid and Turntide Technologies. At JLL, we and our clients have leveraged Infogrid’s smart IoT technology to drive reductions in cost and energy needs in buildings around the world. Turntide tackles one of the largest emitters and costs in existing buildings today: energy usage. By replacing traditional motors with Turntide’s Smart Motor System, we can reduce a building’s energy usage by an average of 64%. Our partnerships with Infogrid and Turntide are two of many examples demonstrating our core belief that substantial reductions in carbon emissions cannot be achieved through hardware or software alone. We must invest in and implement both to effectively scale our impact.  

The final stage of the cycle is demolition/disposal. While not feasible in every instance, buildings should be repurposed and transformed whenever possible considering the environmental impact of erecting a new building. Our partnership with ecoworks, a Germany-based platform that enables seamless renovations to transform deteriorating and carbon-inefficient residential buildings into reinforced and ecofriendly structures, exemplifies our commitment to reducing the climate impact created by needless new construction. 

We are just beginning to scratch the surface of technology that will help decarbonize the real estate industry. There will undoubtedly be many more innovations that disrupt various facets of the built world’s existing lifecycle, and we’re excited to partner with the entrepreneurs and startups creating them.  

Interested in an investment from JLL Spark Global Ventures? Apply here.

Written by Laurent Grill, partner, and Ajey Kaushal, senior investment associate

JLL Spark’s Investment Themes

Investing intelligently in technologies to transform the real estate industry for a better future 

At JLL Spark Global Ventures, we believe no single company can deliver all the innovations to meet the volatile requirements of today’s clients. JLL is committed to transforming the real estate industry globally through technology-based innovations, and JLL Spark invests and partners with the brightest technology startups that share our vision and values.  

Currently, JLL Spark sources more than 1000 property technology (PropTech) investment opportunities annually and conducts due diligence on about 5% of these. JLL Spark looks to leverage technology to improve everything from real estate development and management to leasing and investing, while enhancing the experience of those who occupy commercial spaces. 

Led by Managing Partner Raj Singh, the JLL Spark team focuses on five investment themes most relevant to JLL clients and the real estate industry, identified through client demand and adoption trends: 

  • Construction technology – Building a better, safer, and more productive world 
  • Environmental, social, and governance (ESG) – Decarbonizing the built world 
  • Smart buildings – Delivering superior returns, useability, and impact 
  • Future of work – Reimagining the occupier relationship to their building 
  • Financial technology – Modernizing the economics of commercial real estate 

The theory behind the investment themes  

JLL Spark’s investment themes were chosen based on growth trajectory as well as JLL’s ability to drive value. “These themes are all benefitting from strong tailwinds. There is so much opportunity in these spaces for further innovation and value creation for the commercial real estate industry.” says Kitty Sullivan, investment principal at JLL Spark.  

ESG – Decarbonizing the built world  

Sustainability tops the agenda for JLL and its clients. JLL is committed to reaching net zero goals for our clients’ and JLL-owned assets and properties by 2040. As government regulations increase, the urgency to achieve sustainability has prompted real estate owners, operators, and occupiers to reduce their carbon footprint.  

JLL Spark has invested in several startups that advance sustainability in the built world including ecoworks for digitizing and industrializing the renovation process; Juno, a mass timber building system to create sustainable homes; and Turntide for sustainable operations and electrification solutions to improve energy efficiency in buildings, commercial vehicles, and agriculture.  

Construction Technology – Building a better, safer, and more productive world 

Construction carries the most potential for improvement with a huge scope for innovation and technology use, which JLL could represent through its project and development services. Despite being a multitrillion dollar industry, it is far less digitized than other real estate sectors.  

JLL Spark invests in construction technology (ConTech) startups such as OpenSpace, an AI-powered construction platform that provides a 360° visual representation of the construction site to capture and analyze data. 

Smart buildings – Delivering superior returns, useability, and impact  

The real estate industry demands technology solutions that improve building efficiency. This investment theme reflects the increased adoption of technology to automate building operations, improving the experience of occupiers, tenants, and visitors, while landlords benefit from the enhanced value of their assets. 

JLL Spark has several investments in smart building technology. VergeSense, a platform that provides contextualized insights into how spaces are used, empowers companies to continuously optimize their workplaces. Ecolibrium and Infogrid are IoT platforms that provide predictive insights for preventative maintenance and occupancy planning with data-driven insights. 

Future of work – Reimagining the occupier relationship to their building 

The pandemic accelerated conversations relating to remote and hybrid working. As companies develop their return to office strategies, it is growing clear that the use of office space will never be the same. Developers, owners, and occupiers are looking for technologies to optimize workforce performance and enhance collaboration in the hybrid work environment.  

SwiftConnect is an example of JLL Spark’s investment in technology for the future of work. The solution offers automated access control and booking systems, converting physical offices to function as a network by providing data to employees on demand.  

Financial Technology – Modernizing the economics of commercial real estate 

JLL Spark invests in financial technology (FinTech) to facilitate seamless transactions with increased efficiency and transparency. As business dynamics evolve, tenants and occupiers have the option to move according to their needs with solutions that remove limitations.  

Lev, a FinTech solution in JLL Spark’s portfolio, is a digital commercial real estate (CRE) platform offering direct access to capital from leading financial institutions. Its technology alleviates the industry’s manual lending process, closing CRE loans up to three times faster than existing methods. 

Emerging areas for JLL Spark investments   

The pandemic triggered huge disruptions to logistics and supply chains worldwide. The inadequate infrastructure struggles to handle the ever-rising demand. However, companies that leverage technologies and adopt new business models improved their resilience.

Data is another area on JLL Spark’s radar, but the large amounts of available data are dark, siloed, and unstructured. Once organized, however, data becomes a powerful advantage to various real estate verticals, including sustainability, construction, occupancy planning, talent retention, building management systems, and more.

Where are we heading  

JLL Spark has invested over $340 million across 40+ PropTech startups since June 2018. Over 60% of JLL’s top investor and occupier clients use a JLL Spark portfolio company solution. 

JLL Spark as a PropTech investor offers flexibility, exploring opportunities in startup companies that introduce innovative technologies to the real estate industry. JLL understands that serving its clients requires us to be both tech-forward and resilient; JLL Spark participates by sourcing external innovation that can benefit our clients today as well as prepare them for tomorrow.