Is your real estate technology a value driver?

Driving competitive advantage through real estate technology

• Over the next 3 years, real estate occupiers will be focusing on solutions that support operational agility, while investors are prioritizing tools that focus on value creation and risk management. Sustainability solutions will account for the largest share of increases in technology spending for most organizations.
• Artificial Intelligence (AI) and clean tech solutions are seen as the biggest game-changers for the real estate industry, but most companies have limited understanding of these technologies and adoption rates remain low.
• Most companies are struggling to meet their technology goals. Creating an actionable technology strategy tailored to your organization, building a resilient operating model and embedding new ways of working are all key steps to achieving a robust technology capability and facilitating successful technology adoption.

While the potential of technology to transform real estate operations, aid decision-making and provide competitive advantage is being recognized, many companies are unsure which solutions to prioritize for adoption, how to extract maximum value from their technologies and how to successfully integrate legacy tech with new tools.

Our latest research is informed by the findings of a global survey of over 1,000 decision-makers across 10 markets globally and insights from JLL’s own team of technology experts. We identify the key challenges companies face today and highlight best practice, drawing on the experience of the industry’s most successful tech-adopters.

Perception of technology is shifting from cost center to strategic value driver

Bridging the gap between ambition and successful technology adoption

What can we learn from industry leaders?

Focus on solutions that create value for your business

For most companies, the focus is now shifting away from tech solutions that support hybrid work to technologies that can add significant value to their business. Predictive decision-making, lease management tools and consolidated insights dashboards are some of the tools our respondents are looking to deploy in the near future.

With many firms’ flexible working policies still evolving, having a clear, consolidated view of workplace utilization will be critical for portfolio management and planning over the next three years.

While efficiency improvement and cost reduction have been the focus to date for real estate investors, there is a shift towards technologies that support value creation and risk management. Over the next three years, investors will be focusing on solutions that directly support revenue generation, risk management and underwriting capabilities. Digital infrastructure and building automation technologies are also seen as priority areas.

Our survey highlights a disconnect between tenant expectations and landlord plans for future technology enhancements. Aligning technology offerings with occupier needs, particularly for experience management features, will be crucial for investors to maintain a competitive edge.

Investment in technologies that help manage, reduce and report on carbon emissions is expected to account for the largest share of technology spending increases over the next three years.

Sustainability tech tools not only drive cost savings but also enable companies to meet their decarbonization commitments and strengthen brand reputation. The benefit of being able to see immediate improvements in operational efficiency and to demonstrate ROI for many cleantech solutions, such as JLL’s Hank, will accelerate the pace of adoption.

AI and generative AI technologies are expected to have a profound impact on the real estate industry. Real estate investors and corporate occupiers recognize the potential of AI-powered technologies to improve productivity and simplify complex tasks such as data standardization for portfolio data analytics, IoT data mining for facility management or price modelling and forecasts for investment management, among many other applications.

Understanding how artificial intelligence will impact your business and creating a test and implementation strategy will be key to mitigating risks and harnessing the potential for growth.

Most companies are struggling to extract full value from their real estate technology programs

Around 85% of our respondents expect to increase their investments in real estate technology over the next three years. 92% of occupiers believe that integrating technology into their operations will give them an edge in the market and 91% say that they are willing to pay a premium for tech-enabled space.

Despite boardroom ambition, many companies are still in the early stages of their technology adoption journey. Only 13% of our respondents consider themselves to be early tech adopters, actively piloting or deploying new technologies. 32% would like to do so in the near future but lack a clear strategy, skills or budget for effective deployment.

While companies are increasing their investment in real estate technology, they often struggle to realize its full potential. Fewer than 40% believe their existing tech programs have been highly successful and 80% feel that they are not extracting enough value from the technologies they're already using.

Three imperatives to drive value with technology

Based on extensive work guiding real estate technology programs, JLL has established a holistic framework for success. Our survey results highlight a leading group of companies that are more advanced in their technology journey and illustrate a set of proven practices across three imperatives to drive value from technology.

Shaping an actionable technology strategy

Defining an actionable technology strategy – and set of objectives – that is tailored to your organization’s specific operating model, goals and capabilities is essential in enabling real estate to drive value for the wider business; 78% of companies don’t currently have an actionable strategy in place. The technology strategy should identify how real estate supports your business objectives, outline your future state ambitions and lay out a clear, achievable roadmap to reaching your vision.

Companies should establish a resilient organizational architecture for planning, funding and governance. The most successful tech adopters have strong executive leadership engagement, adequate resourcing and effective cross-functional decision-making groups to bridge gaps. Leading companies adopt an ecosystem approach to improve technology capabilities by upskilling, hiring new talent, outsourcing and partnering with external experts.

Success also depends on embedding a new way of working for project teams that takes an iterative approach integrating change management and feedback loops, uses data and clear measures of success to drive the implementation process and actively engages external stakeholders.

All three of these imperatives: a clear technology vision and strategy; a robust operating model; and new, more flexible ways of working that utilize an ecosystem of inhouse experts and external partners, are key ingredients of the most successful technology strategies.

To find out more about how to create a successful technology adoption roadmap and to explore the results of our survey in full, download our Global Real Estate Technology Survey.

Technology driven by real estate expertise enables smart space utilization, data-driven decision-making, sustainability, worker productivity and high ROI.

Technology