Corporate Real Estate fit for the future
Latest JLL survey shows China outshines global peers in terms of spending and adoption of new CRE technologies
SHANGHAI – When it comes to using technology in corporate real estate (CRE), half of enterprises in China are either early adopters or fast followers of the latest approaches, says JLL (NYSE: JLL). Moreover, the proportion of companies in China with significant CRE technology spending is markedly higher than the rest of the world, with investment in the field expected to increase—according to JLL’s latest report, The Future Fit: How corporate real estate enhances business performance.
The report is based on the analysis of JLL’s Global Future of Work survey, the fourth edition of global surveys of CRE leaders worldwide, which is carried out biennially. The survey asks in-depth questions to 561 companies from more than 30 countries. The focus was firmly on the Future of Work and the level at which companies are embracing its five core dimensions of digital drive, continuous innovation, human experience, operational excellence, and financial performance – a model that was introduced by JLL in 2017.
Getting ‘Future Fit’
Key findings of the global survey include the criteria that JLL uses to determine an enterprise as ‘future fit.’ To be called so, organizations must pursue advanced strategies around innovation, show strong levels of collaboration across business units, and have a proactive attitude toward the implementation of digital, data and other technologies.
“Understanding and embracing ‘future fit’ strategies can assist CRE leaders in adding more strategic value, and help with achieving broader business goals in their own organizations,” explains Susan Sutherland, Head of Corporate Solutions Research for JLL Asia Pacific.
“By capitalizing on digital disruption to traditional working practices, they can optimize the connection between people, spaces and technology,” Sutherland adds.
Based on the analysis of the survey results, JLL concluded that 18 percent of respondents globally were “future fit.”
China’s Digital Drive
Delving deeper into the country level—particularly in China—JLL also produced a national report that examined 43 responses from Chinese companies. As Tong Sun, Chairman of Corporate Solutions for JLL China, points out, “At the national level, we see China racing ahead of other countries in terms of spending and adoption of CRE technology. For example, our survey found that 14 percent of companies in China spent over a quarter of their CRE budget on technology, which is double than that of the global average.” Perhaps because of this, China is leading in the utilization of more advanced technologies—such as 3D printing, robotics, and drones—in its CRE activities, which have been adopted by 30 percent of enterprises in China, compared with just 18 percent globally.
Indeed, China’s focus on digital influences its CRE. “Chinese CRE leaders tell us that they believe that CRE can add value to digital activities, and their executives feel the same,” says Sun. When asked to what extent their C-suite or executive board believes that CRE could add value to digital, 40 percent of CRE teams in China shared “significant value,” putting China in a prime position, compared with a global level of 25 percent.
The Human Experience
In addition, the survey shows that the percentage of Future Fit respondents from China was roughly in line with the global average. In some areas, however, the focus across the country reflects different priorities from global trends, specifically in driving its operational excellence through employee productivity, as part of its Human Experience (HX) goals. More than half of the respondents selected “Boosting employee productivity by having a clear focus on delivering results,” compared with 28 percent among global “future fit” enterprises and 35 percent globally.
Sun confirms, “CRE leaders in China believe CRE function can add significant value to operational excellence and thus, HX goals are focused on employee productivity, flexibility, and agility. We can expect employee and workspace flexibility to catapult the future demand for flexible space, even ahead of global peers.”
Measuring CRE Success
Using metrics to track progress and gauge success is crucial for CRE teams, and with the strong focus on operational excellence, Chinese enterprises are taking advantage of the CRE metrics more than its global counterparts do. Based on the survey results, the average level of the adoption of the metrics in China is 46 percent, which is well above the global average of 33 percent—although still behind globally “future fit” enterprises at 61 percent.
Such figures show that Chinese enterprises are headed in the right direction in a field where new technology and innovation in big data are offering even more detailed measures of success. As Sutherland states, “Next generation metrics will support data-driven performance, with metrics for the future reflecting the diverse priorities of a modern CRE function, including in areas such as digital and Innovation.”
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JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. Our vision is to reimagine the world of real estate, creating rewarding opportunities and amazing spaces where people can achieve their ambitions. In doing so, we will build a better tomorrow for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $16.3 billion, operations in over 80 countries and a global workforce of over 90,000 as of December 31, 2018. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com