A new report from JLL finds commercial real estate (CRE) occupiers are “willing to put their money where the tech is,” with over 80% of companies increasing technology budgets despite a challenging operating environment.
According to JLL’s 2023 Global Real Estate Technology Survey, 91% of occupier respondents are willing to pay a premium for tech-enabled space as they look to technology for strategic value and increased revenue. In fact, real estate tech budgets are set to grow faster than investments in headcount, footprint, and operating budgets.
JLL’s research finds that sustainability tools will account for the largest share of increases in technology budgets, underscoring the business and regulatory pressures driving the race to net zero. Respondents expect clean energy solutions to have the greatest impact on real estate over the next three years. For example:
- Forty-five percent of occupiers plan to adopt energy/emissions management tech in the coming year.
- The adoption rate for data science and modeling tools—used to analyze energy use, occupancy, and financial costs across buildings and locations—rose 14% from 2022-2023 (up from 26% to 40%).
“Organizations are shifting their tech priorities from cost reduction to strategically improving their business,” said Sharad Rastogi, CEO of Work Dynamics Technology. “Occupiers are looking for technology that helps increase revenue, enhance business decision-making, and improve their sustainability metrics.”
Following sustainability tech, respondents pointed to artificial intelligence (AI) and generative AI as the technologies expected to have the greatest impact on real estate over the next three years. Surprisingly, most conceded limited understanding of AI despite ranking it highly.
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, optimizing and enhanced decision-making.
According to the survey:
- The focus is shifting from remote working tools to in-office collaboration technology, with adoption rates jumping from 40% to 50% from 2022 to 2023. In fact, the top tech already in place is in-office collaboration technology.
- Health and well-being tech solutions rose from 25% to 48%.
- Platforms to enable consolidated insights (47%) and drive predictive management (43%) are among the top adoption priorities.
- Immersive workplace technology, such as virtual reality and augmented reality, is one of the top five technologies companies intend to adopt next (44%).
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 CRE leaders at major occupiers and over 400 leaders at real estate investors, landlords, and developers. Research respondents are situated in 10 markets globally: Australia, Canada, China, France, Germany, India, Japan, Singapore, the U.K., and the United States.