Companies leveraging commercial real estate and other digital technologies are expected to have 39% higher growth in profits compared with those businesses which remain cautious to adopt innovation, according to the Future of Work survey conducted by JLL.
The global survey, which captured the views of 561 commercial real estate (CRE) directors, found that large enterprises that invested in information technology and digital solutions were likely to experience a profit of growth 31%, compared with 19% of those who were late adopters of technology.
Forty-one percent of directors indicated that they currently outsource CRE services and an additional 30% stated that they plan to increase looking outside of their organizations for real estate services.
While the news bodes well for CRE providers and leasing agents, client expectations surrounding CRE services will significantly change from traditional costs-savings to technology-enabled services, according to Dr. Marie Puybaraud, Global Head of Research at JLL Corporate Solutions.
Commercial real estate directors identified four key areas where they expect to adopt commercial real technology solutions.
Top 4 Areas of Investment in Commercial Real Estate Technology:
- Improving Employee and Workplace Experience
Workplace and employee experience were rated as the highest area of interest among commercial real estate directors. Large enterprises, often among the most coveted CRE tenants, are spending billions to recruit and retain their best employees and adopting tools such as smart building and workplace apps to enhance and monitor employee productivity and workplace experience. Commercial real estate owners and landlords must adopt and provide these solutions if they expect to remain competitive as the industry moves towards adopting innovation.
- The Internet of Things Technologies
The second area of technology investment identified by respondents in the survey was the adoption of the Internet of Things (IoT) sensors and smart building devices. This will be a key area of investment by CRE directors as they look to improve workplace and employee experience, reduce energy costs, and update basic building systems such as lighting and physical security.
According to research firm Memoori, commercial buildings are expected to deploy nearly $75 billion IoT devices by 2021. The use of IoT devices to collect data and monitor people and things inside of buildings is becoming a ubiquitous requirement across all verticals in the CRE sector, including industrial warehouses, commercial offices, retail spaces, hotels, and hospitals.
- Automated End-to-End Workflow Solutions
A third investment identified by CRE directors is finding solutions to automate end-to-end workflows. Processes such as property procurement, leasing, and contract management require coordination at many levels, and CRE leaders are looking to find more efficient ways of managing and coordinating complex operations.
- Virtual Reality as Workplace Reality
The fourth, and perhaps most surprising area of investment identified by CRE directors, was virtual reality (VR) and augmented (AR) reality solutions.
While it may seem that the use of VR/AR is still far ahead in the future, an increasingly globalized and remote workforce is creating demand for enterprises to connect employees beyond traditional office walls. VR/AR technology solutions will become a new hub for value creation, enabling employees who are geographically dispersed to collaborate beyond the office, according to JLL. In the not-so-distant future, a geographically dispersed team of office workers is more likely to meet in cyberspace using virtual reality headsets than in person.
5G Cellular Connectivity Key to CRE Innovation
While the adoption of these technology solutions will certainly transform the future of work and help early adopters gain a competitive edge, their deployment is directly linked to the provision of a robust cellular digital infrastructure.
5G, the next generation in cellular connectivity, will be essential to achieving the bandwidth, speed and security requirements to traverse the broad range of VR/AR applications and real-time data transmission rates required for these applications to work effectively.
Whether it’s deploying basic IoT building systems such as physical security, lighting control, and fire detection, or tech-savvy workplace/smart building apps and the virtual conference meetings of the future, the digital connectivity backbone will need to be cellular.
Other connectivity solutions such as WiFi are just not capable of providing the enhanced security, improved latency, and data transmission speeds required to deploy many of applications emerging in the commercial real estate technology sector today