JLL’s Global Technology Survey: JLL Spark investments align with client and investor tech focus
In the face of challenges within the VC market and the persistent uncertainties of the broader economic landscape affecting the commercial real estate sector, technology remains a paramount focus for investors, landlords, and occupiers. According to JLL’s latest Global Technology Survey, 85% of companies are increasing their technology budgets despite a difficult operating environment. This unwavering emphasis on technology can be attributed to several crucial reasons.
The real estate industry is currently experiencing a significant digital transformation as technology revolutionizes how we live and work. Technology has become a catalyst for creating strategic value and facilitating new business models. It enhances decision-making capabilities and boosts productivity. Surprisingly, even in a difficult operating environment, more than 80% of companies are planning to allocate more of their budget to technology, according to the report. This trend is driven by the recognition that technology provides a competitive edge and improves tenant retention rates. In fact, 91% of occupiers are willing to pay extra for spaces that incorporate technology.
JLL Spark’s investment focus aligns perfectly with the technology requirements of JLL’s clients.
For occupiers, although the immediate focus is on supporting hybrid and remote working and attracting and retaining talent, there is a notable shift in sight. In the coming three years, occupiers will prioritize areas that enable real estate functions to serve a broader range of business objectives. While the return to office remains significant in the post-pandemic landscape, it is now seen as a fundamental expectation rather than a long-term driver of technology use. Occupiers are now directing their attention towards tools that facilitate a transition from reactive to predictive decision-making, such as lease management tools and insights dashboards. They are also seeking technological support to achieve strategic goals, such as emissions management. As illustrated in the chart below, JLL Spark has already made several investments that cater to the present and anticipated requirements of our occupier clients.
Technology is also becoming increasingly important for investors as they seek to address crucial business requirements such as design, fundraising, and asset valuation. Similar to occupiers, there is a significant shift from cost reduction to value creation among investors. They are now prioritizing the improvement of asset selection and management to enhance operating income, minimize vacancies, and explore new revenue streams. The priorities of investors reflect a more operationally intensive approach to managing assets, emphasizing the need for comprehensive building management solutions that ensure efficient operations and minimize environmental impacts. As investors move towards the next stage of technology adoption, they are focusing on digital infrastructure, including sensors, IoT systems, and converged building networks, as well as building automation, covering energy management, and sustainability reporting. The table below shows the investments that JLL Spark and the JLL Technologies division has made that address the current and future needs of our investor clients. In addition, JLL has invested in other technologies like Building Engines and Skyline/Horizon that have not been mentioned.
Over the years, JLL Spark has actively invested in ConTech, FinTech, smart buildings, and future of work, resulting in a robust portfolio of technology solutions that deliver significant benefits to JLL and our clients. As a strategic venture capital investor, JLL Spark remains attuned not only to the trends and developments in the PropTech industry but also to the unique business challenges, technology needs, and investment preferences of our clients. This deep understanding enables JLL Spark to continuously invest in the convergence of cutting-edge technologies and client demands, securing the perfect harmony between innovation and client-centric solutions.
Written by Danny Klein, VP of Innovation at JLL Spark
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