Though real estate assets investors, developers and corporate occupiers and their companies are struggling to adopt and deploy technology effectively and successfully, a recent survey has found that they are really on track as they see gain in doing so.
According to the survey by Jones Lang LaSalle (JLL) which polled over 1000 senior decision makers globally involving investors, developers and corporate occupiers, companies have started to recognize that real estate technology isn’t just a cost centre, but also a key differentiator that’s crucial to meeting their wider objectives.
The survey notes, however, that despite the ambitious agenda, most companies are struggling to adopt and deploy technology effectively and successfully, adding that this is consistent across investor-types and occupier-industries.
Yuehan Wang of Research and Insights on Real Estate Technology and Innovation at JLL offers a lead to dealing with the challenges associated with deploying these technologies.
“To help navigate these challenges, we have identified a leading group of companies that are more advanced in their adoption and have achieved greater success with their high initiatives,” Wang reveals.
“What we can see is that these companies are outperforming by focusing on three key initiatives,” she adds, listing the initiatives as shaping an actionable tech strategy, building resilient operating model, and driving new and more agile way of working.
Emilio Portes Cruz, also of JLL, notes that there are areas of the greatest impact of real estate technology for investors, pointing out that, when it comes to asset management, solutions that help improve efficiency and reduce costs have been the focus for investors.
“But we are seeing a shift to technologies that support value creation and help increase returns. These range from risk management tools to tech solutions that improve valuation and the underwriting capabilities,” he says.
We see investors increasingly use technologies that can help with asset selection and artificial intelligence powered analytical tools that can help inform investment strategies,” he adds, disclosing that, at JLL, they we use a broad range of technologies, specifically for investors to help their client make better decisions.
“In fact, roughly one in five of all our capital markets globally are supported by our artificial intelligence platform,” he says.
It is expected that over the next three years, investors will prioritizing some technologies and, according to JLL, What type of technologies will investors be prioritizing over the next 3 years?
investors are already looking at smart building technologies and sustainability solutions such as automated energy management and sustainability monitoring and reporting. These solutions help achieve cost savings, but also help companies meet decarbonization targets.
“In the circumstance, companies can see immediate improvement in operational efficiency and can demonstrate return on investment. So, we expect the pace of adoption to accelerate. We know from our survey that occupiers are prepared to pay a premium for tech-enabled space, and this is exactly the type of technologies they are looking for,” Cruz observed.
This means that opportunities exist for investors in this space and for young markets like Nigeria, this is another destination for yield-seeking investors, both local and foreign.
Besides technology, another area of concern for JLL going into the new year is hybrid work where it sees a big disconnect between what the employers expect from work today and what employees are ready to invest into their company.
Flore Pradere explains that, on their side, employers do not accept fully remote anymore, pointing out that one in three employers have implemented compulsory attendance to the office.
“Today, productivity gains are seen as the second driver for enticing people to be back in the office. But employees on their side, for half of them, tell us that their home environment better supports their performance.
The second challenge is that the employers do not know how to orchestrate hybrids and to secure a harmonious office occupation. Four in 10 today record office utilization levels below 40 percent,” Pradere notes.