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How Technology Adoption Will Drive Real Estate's Future Growth

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peter harris

Over the decades, we have seen technology revolutionize commerce, communications, information, transportation and, most recently, fintech. But real estate, the world’s largest investor class ($32 trillion), remains in the relatively early stages of technology adoption. But there can be no doubt. The data revolution is progressing rapidly. Commercial real estate is undergoing a paradigm shift, with technology finally catching up with market needs and the once-established playing field is forever changing.

Just think of the retail market before Amazon, how Facebook changed the advertising industry, and how Uber changed transportation. Frankly, anyone who thinks they can attempt a business in the real estate industry in the next few years without adopting the best proptech on offer is factually unrealistic.

Technology can and does support the real estate industry in myriad ways. For example, through the collection and analysis of data to measure environmental, social and governance (ESG) performance, enabling real-time optimization to improve sustainability factors such as energy use and waste. . The key technologies shaping the future of real estate are automation tools, Internet of Things (IoT), augmented reality (AR), virtual reality (VR) and blockchain..

To date, perhaps the biggest impact proptech has had on the overall built environment is the evolution of IoT devices. For example, the maintenance systems that run the building, mobile devices, energy smart meters, and many other sensors placed inside the building. plant room. Of course, this will accelerate in the coming years. It’s also only a matter of time before people collectively realize there is a real payoff to investing in sustainable technology. We’ve come to a point where the financial picture of sustainable technology stacks up very clearly for some time, and in terms of tracking energy costs, consumption, and impacts, we’re really looking at renewable energy, data, transparency, etc. We are seeing progress and scale in the field.

We are also at the height of the disruption in the field of health and wellbeing workplace technology, including health tracking apps on wearables and smartphones, but also occupational health tracking systems, employee engagement apps, virtual assistants, and even smart lockers. I’m in the middle. Digital workplace technologies offer a much healthier lifestyle for space tenants and users. They are more productive and satisfied with their work, and can get more satisfaction overall as a partial result of being satisfied by the environment in which they spend their time. Given the cubicles that were offices in the past, employees worked together nearby and got sick because it was the only option. New ways of working can help keep employees healthy, present, sharp, energized and receptive. They interact in a symbiotic way with the workplace, which is the embodiment of corporate culture.

The journey that we at JLL have taken with technology is an interesting one. Because as a company, technology is one of the main focus areas of our business. There are two main aspects to travel. Long before proptech became a buzzword, JLL recognized that there was already so much technology out there that it was difficult to track and evaluate what was out there and how it was being used. . in the build environment. That is why in 2019 we officially partnered with MIT to create a proptech hub called JLL MIT Real Estate Innovation Lab. This will start building a data science army, an infrastructure of people who can not only track emerging proptechs, but actually engage in those stories. , can reflect on how to talk to stakeholders and make better decisions.

Second, in 2017 JLL secured a significant amount of funding purely from its own balance sheet called the JLL Spark Fund. The purpose of this fund was to identify and invest in innovative and scalable Silicon Valley proptech companies early on with the aim of shaping them and then infiltrating them throughout our business and industry. . Since then, the Spark Fund has invested in 20 of the world’s best proptech startups, and we’re starting to see results.

In summary, Proptech will continue to improve real estate efficiency, ultimately leading to better returns on assets, less friction and greater transparency. Organizations must adopt solutions that drive savings, energy and time savings while increasing revenue. Organizations have an obligation to deploy the best solutions for them in order to remain relevant and competitive in the market.

The author is Co-CEO of Sub-Saharan Africa and Maghreb, JLL.