By Peter Harris
Over the course of several decades, we have seen how technology has revolutionized commerce, communications, information, transportation and, more recently, fintech. Yet the real estate sector, the largest class of global investors ($ 32 trillion), remains in the relatively early stages of adopting the technology. But we shouldn’t have any doubts: the data revolution is coming fast. Commercial real estate is undergoing a paradigm shift, with technology finally keeping up with market needs, forever altering what was once an established playing field.
Just think of the retail market before Amazon, how Facebook changed the advertising industry, or how Uber transformed transportation. Frankly, anyone who thinks they can attempt to operate in real estate in the next few years without embracing the best proptech on offer is unrealistic with the facts.
Technology can support and support the real estate sector in a myriad of ways; for example, through the collection and analysis of data to measure environmental, social and governance (ESG) performance, enabling real-time optimizations to improve sustainability factors such as energy consumption 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.
Up to this point, the point where proptech has probably had the greatest impact in the built environment is in the evolution of IoT devices, for example in maintenance systems that manage buildings, mobile devices, smart energy meters and numerous other sensors. placed inside buildings and plant rooms. This will obviously accelerate over the next few years. It is also only a matter of time before people realize en masse that there is a real return on investment in sustainable technology. We have been at a point for some time where financial data from sustainable technology accumulates very clearly and while we are seeing progress and scalability in areas such as renewable energy, data and transparency in terms of monitoring. of energy costs, consumption and impact.
We are also in the midst of a disruption in the workplace technology space for health and wellness, which includes not only wearable devices and smartphone health monitoring apps, but also occupational health monitoring systems, health and fitness apps. employee engagement, virtual assistants and even smart lockers. Digital workplace technology creates a much healthier lifestyle for tenants or space users: they are more productive and satisfied in their work and more content overall as a partial consequence of being satisfied with the environments they spend their time in. time. When you think of the cubicles that were once the offices, of the people who work closely, sick at work because that was the only option, the new way of working helps employees to be healthy, to be present, to be awake. , energetic and allow them to interact symbiotically with the embodiment of their corporate culture: your workplace.
The journey that we as JLL are making in terms of technology is an interesting one, because as a company it is one of the dominant focus areas of our business. There are two main aspects of the journey: long before proptech became a buzzword, JLL recognized that there were already so many emerging technologies that it was proving difficult to track and take stock of what was out there. and how it could be used in the built environment. Then, in 2019, we formally partnered with MIT to create a proptech hub called the JLL MIT Real Estate Innovation Lab, which tracks emerging proptechs and begins building the army of data science, the infrastructure of people who can actually engage in those stories, be able to talk to stakeholders, and reflect on how to make better decisions.
The second is that in 2017, JLL set aside a substantial amount of money funded solely from its own balance sheet called the JLL Spark Fund. The purpose of this fund was to identify innovative and scalable Silicon Valley proptech companies, invest in them previously in order to shape them and then integrate them into our business and the industry as a whole. Since then, the Spark Fund has invested in twenty of the best proptech startups in the world and we are starting to see the fruits, which is really exciting and revolutionary.
In summary, proptech is and will continue to drive efficiency in the real estate sector, ultimately leading to better asset returns, reduced friction and greater transparency. Organizations must now adopt solutions that lead to savings, energy and time, while increasing revenue. It is up to organizations to implement solutions that work best for them in order to remain relevant and competitive in the market.
The author is Co-CEO, Sub-Saharan Africa and Maghreb, JLL.