90% of occupiers willing to pay a premium for tech-enabled spaces
Latest JLL research finds over 80% of companies globally are increasing technology budgets despite a challenging operating environment.
SINGAPORE, 1 November, 2023 – Commercial real estate occupiers are willing to put their money where the tech is, according to new research from global real estate consulting firm JLL (NYSE: JLL). JLL’s 2023 Global Real Estate Technology Survey found that 93% of occupiers in Asia Pacific (Global: 91%) said they would pay a premium for technology-enabled spaces, and believe that technology will drive competitive advantages (Global: 92%).
As organisations worldwide look to technology for strategic value and increased revenue, 85% of occupiers and investors plan to increase their investment in technology despite the current challenging operating environment. JLL’s research also finds that sustainability tools – such as energy/emissions management tech and smart energy infrastructure – will account for the largest share of increases in technology budgets, underscoring the business and regulatory pressures driving the race to net zero.
Additionally, JLL’s research found occupier tech priorities are expanding beyond cost reduction and facilitating remote work to include technologies that drive value to their overarching business goals through collaboration, optimising and enhanced decision-making.
“Organisations across the globe acknowledge that technology plays a critical role in navigating disruptive challenges, driving transformation and enabling agility – and Asia Pacific is no exception,” said Susheel Koul, Chief Executive Officer, Work Dynamics, Asia Pacific, JLL. “While the immediate focus remains on technology to support hybrid work and attract and retain talent, occupiers will prioritise solutions to increase revenue, improve sustainability metrics and improve business decision-making in the next three years.”
Following sustainability technology, respondents identified artificial intelligence (AI) and generative AI (GenAI) as the technologies expected to have the greatest impact on real estate over the next three years. Yet, understanding of these technologies remains significantly low compared to others, such as cloud and edge computing, as well as AR/VR.
There is also a sizeable gap between ambition and current technology adoption levels, with many companies lagging far behind their objectives. In Asia Pacific, occupiers in India are relatively more advanced in adopting core technologies1 - similar to occupiers in the U.S and investors from the UK and Canada. In comparison, current adoption rates for core technologies are moderate, with none exceeding a 50% uptake.
“Most organisations do not have an actionable tech strategy in place, and less than half have seen success in their tech programmes. More encouragingly, even though the majority of organisations recognise the benefits that technology can offer, many are still struggling to make tech a true value driver, which will create opportunity,” said Vivek Satpathi, Head of Client Growth, Asia Pacific, JLL. “To harness the opportunity, we recommend that organisations start by shaping an actionable technology strategy, which can translate into a strong operating model with the right resources, people and organisational structure in place.”
The JLL 2023 Global Real Estate Technology Survey was conducted by Meridian West during May and June 2023. The 1,006 decision-makers surveyed included over 600 corporate real estate leaders at major occupiers and over 400 leaders at real estate investors, landlords and developers. Research respondents are in 10 markets globally: Australia, Canada, China, France, Germany, India, Japan, Singapore, the U.K. and the United States.
1JLL has identified 21 technologies across 6 categories which comprise the core tech stack for occupiers and 23 technologies in 6 categories for investors. Please refer to Figure 2 in the JLL Global Real Estate Technology Survey 2023 report here.
For over 200 years, JLL (NYSE: JLL), a leading global commercial real estate and investment management company, has helped clients buy, build, occupy, manage and invest in a variety of commercial, industrial, hotel, residential and retail properties. A Fortune 500® company with annual revenue of $20.9 billion and operations in over 80 countries around the world, our more than 105,000 employees bring the power of a global platform combined with local expertise. Driven by our purpose to shape the future of real estate for a better world, we help our clients, people and communities SEE A BRIGHTER WAYSM. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.