Top CRE Trends 2021 Corporate Solutions - JLL
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Top 10 global CRE trends in 2021 01 02 03 04 05 Hybrid future Humanizing workplace Health imperative Digital first Race to net zero Work from anywhere will Next-gen workplaces Employee health and Technology enables CRE will be critical in drive footprint dispersion will create environments wellbeing will be central everything. Develop digital achieving enterprise net and portfolio transformation where people thrive and to future CRE strategy capabilities to drive value zero targets performance flourishes and investment for employees and customers using technology as the enabler 06 07 08 09 10 Responsible real estate Distributed urbanization Flex transformation Future of metrics Resilience Commitment to bring a Demand for a more Flex space will be a key New metrics and insights Always-on positive change through sustainable and resilient strategic tool to drive will enhance data driven transformation will real estate will be at the urban model will result in portfolio agility post-Covid portfolio and enable the require an always-on forefront of CRE strategy the changing spatial logic future of work resiliency in 2021 of cities
Hybrid future Workers are eager for more flexibility Remote work frequency after COVID-19: 2.4 days a week on average Choosing my working hours, having flexible schedules 71% Distributed and digitally 26% Switching to a 4-day working enabled workplace model week, with 1 day available for my 74% Exclusively outside Mostly remote work free time of the office + No office sites While at my office, being able to choose the most suitable 57% workspaces according to my tasks Living far away from the city and 50% Hybrid going to the office only when 57% Partially remote work Office + Remote + Large HQ a/o multiple necessary hubs a/o multiple micro- Not coming to the office anymore, thanks toa permanent remote- 52% hubs, flex spaces working arrangement Working from a coworking facility 24% close to my home, at least 1 day a 43% week Exclusively in the office Limited remote work Appealing + Large HQ Work from anywhere Q: Some companies are providing new flexibility options to their Q: How many days a week would you like to work remotely will drive footprint employees. How appealing are they to you? Sample : All respondents n= 2033 from home after COVID-19? Sample : All respondents n= 2033 Source: JLL, Human Experience, 2020 Source: JLL, Human Experience, 2020 dispersion and portfolio transformation Explore hybrid workplace mobility for greater future resiliency 2
Humanizing workplace The office is the preferred location for some crucial activities To learn and grow Creating a worker-centric 52% 42% 6% Performance enablers* workplace To socialize Spaces #1 Creative spaces 60% 21% 19% #2 Learning & Development spaces #3 Coworking spaces To solve work-related issues #4 Outdoor spaces 69% 28% 3% #5 Privacy spaces To collaborate and run meetings Tech 70% 24% 6% #1 Social networks #2 Learning & Development tools To manage or be supported by your management #3 CRM tools #4 Business Intelligence tools 70% 26% 4% #5 Project Management tools Next-gen workplaces Better in the office Better at home Better in a third-party place *Spaces & technologies which have the will create Q: After your recent homeworking experience, where would you prefer to greatest impact on performance among High Performers compared to other groups do the following tasks in the future? At home, in the office or in a third- environments where party place? Sample: All respondents n=2033 Source: JLL Human Performance (2020) Source: JLL Human Experience (2020) people thrive and performance flourishes Enable human performance by reimagining your workplace and creating positive environments in partnership with HR and IT 3
Health imperative Top 5 services expected by employees post pandemic 49% Well-being services 39% 34% of employees are unable to Advanced food services 38% 34% Renewed focus on switch off after a demanding employee health and Health services 37% 34% task at the office wellbeing Sports services 38% 24% Source: JLL, Human Performance (2020) ‘Life is easy’ services 40% 20% Mobility solutions 37% 21% Service desks 58% dedicated to work Cultural services 38% 37% 17% 15% of employees prioritize working in a company that Beauty services 35% 16% ensures their physical and mental well-being Childcare services 26% 17% Employee health and Source: JLL, Human Experience (2020) This would be nice This would be wonderful wellbeing will be Q: What kind of services would you delight in having access to? Sample : All respondents n= 2033 central to future CRE Source: JLL, Human Experience (2020) strategy and investment Develop a robust health and wellness program to care for the workforce and address the impact on mental health and fatigue and support employee health 4
Digital first 59% of executives say COVID-19 has accelerated digital 5 1 Dynamic, interconnected transformation at their ecosystem of partners and organizations Apps Devices technologies Source: IBM, COVID-19 and the future of business (2020) 68% of corporates cite forging Digital innovation partnerships as a core Transformation priority for the next 12 months. 4 Source: EY, Tech Horizon: Six habits of digital Collaboration Access 2 transformation leaders (2020) Technology enables 40% of CEOs said their CIO or Data everything. Develop tech leader will be the key driver of business strategy—more than the digital capabilities to CFO, COO, and CMO combined. 3 drive value for employees Source: Deloitte, The new CIO: Business-savy Any Device – Any App – Any Data Anywhere – Anytime and customers using technologist (2020) Source: JLL Research (2020) technology as the enabler Harness the power of digital ecosystems to accelerate transformation of work, your workforce and the workplace 5
Race to net zero Global commitments to net zero Every CRE decision within the property double in less than a year lifecycle should consider net zero carbon Cities and regions with a carbon footprint Decarbonization of greater than the emissions of the US and real estate companies with a combined revenue of Adopt Occupy or more than $11.4tn are now pursuing net acquire net sustainable zero goals. zero carbon design principles buildings through and specifications This now includes 22 regions, 452 cities, sustainability when looking to 1,101 businesses, 549 universities and appraisal/due develop, refurbish 45 of the biggest investors. diligence or fit-out assets Source: Data-Driven EnviroLab & New Climate Institute, Accelerating Net Zero (2020) Manage assets towards 40% of global greenhouse gas a net zero carbon by optimizing a emissions come from buildings and, if building e.g. lighting upgrades; left unchecked, they're set to double HVAC replacement, digital by 2050. Buildings account for a third technology CRE will be critical in of global energy consumption achieving enterprise Source: theclimategroup.org; Source: JLL Research (2020) net zero targets Accelerate adoption of net-zero strategies across CRE portfolios and full real estate life cycle 6
Responsible “Responsible real estate calls for a systemic change driven Real Estate by a holistic view of the industry and its approach to the development and management of real estate.” Source: Bloomberg Green, JLL (2020) Reimagining a better world through the built JLL’s Responsible Real Estate Framework environment Promote fulfillment through Avert climate change and replenish Earth’s resources spaces and experiences Increase resilience of people, Purposeful places where places and communities diverse and collaborative cultures and communities thrive. Commitment to bring a positive change through Create smart, digitally Deliver authentic places where people feel a true real estate will be at the connected environments sense of belonging forefront of CRE strategy Source: JLL Research, 2020 in 2021 Leverage built environment to bring positive and sustainable change that fosters health and prosperity of people and planet 7
Distributed "The cores of our cities will be reimagined to reflect their changing role Urbanization in the urban ecosystem. They will re-emerge as hubs of innovation, collaboration and interaction" Source: JLL Global Cities Research (2021) The hyperconnected city region The rise of polycentric city 72% of employees prioritize having a great work-life balance, spending more time with their families Source: JLL, Human Experience (2020) 57% of employees prioritize commuting less, working and living locally and consciously Source: JLL, Human Experience (2020) Demand for urban last-mile delivery is expected to grow by 78% by 2030 Source: WEF, The Future of the Last-Mile Ecosystem (2020) Demand for a more sustainable and resilient Due to value chain disruptions, companies can expect losses equal to almost 45% of one urban model will result year’s profits over the course of a decade. in the changing spatial Source: McKinsey, Risk, resilience, and rebalancing in global value chains (2020) Source: JLL, The Business of Cities (2020) logic of cities Align location strategy with the evolving spatial logic of cities and build sustainability and resilience into your property portfolio 8
Flex transformation Future corporate demand Flex operator consolidation 33% of CRE directors globally say 2020 leasing by flex operators was down - Evolution of flex the use of coworking / flex space 82% y-o-y. will increase post-Covid. 2021 will see market consolidation on the Source: JLL, Reimagination Pulse Survey (2020) back of ongoing business failure, locations closures and M&A activity. Source: JLL Research (2020) Product innovation On-demand space, corporate memberships and spec suites/ plug & play models will Flex space will be a rise in importance as corporate demand flexibility and little capital expenditure. key strategic tool to Source: JLL Research (2020) drive portfolio agility post-Covid Incorporate flexspace into your portfolio in response to shifting work preferences. 9
Future-proof metrics 70% of metrics that companies adopt in the next three years will be non-traditional Source: JLL, Metrics that Matter (2019) Forward-looking, Future state metrics will focus on: Attributes of future state metrics: transformation-oriented metrics Human ✓ Continuous, real time data collection Performance ✓ A mix of past, present and future measures. Including forward-looking, anticipatory, predictive ones. ✓ Responsive, agile, adaptable ✓ Metrics harness varied data and advanced analytics Portfolio ✓ Encompasses a broad range of financial and non- financial measures ✓ Aligned with strategic aims and objectives ✓ Metrics based on the needs of employees and other New metrics and insights stakeholders as well shareholders Responsible will enhance data driven ✓ Consistencies achieved with standardized metrics real estate and clear data governance practices portfolio and enable the future of work Build a metric-driven culture to empower data driven decision 10 making in real time
Resilience 42% of employees report their company 87% of executives will prioritize wants to promote a resilient enterprise – enterprise agility over the next two years Being adaptive, agile able to innovate and adapt to future crises Source: IBM, COVID-19 and the future of business (2020) and responsible Source: JLL, Human Experience (2020) The Reimagine framework to shape the future of work Accelerating the digital transformation & technology enablement Business People Workplace CRE strategy strategy strategy strategies Always-on Reimagining transformation will require an always-on Source: JLL Research, 2020 Adaptive & resilient, sustainable & responsible resiliency Build a high level of elasticity into your CRE strategy to adapt to continuous shifts in demand 11
Thank you Richa Walia Tom Carroll ? James Taylor Director, Corporate Research, EMEA Head of Corporate Research, EMEA Head of Corporate research, APAC + 44 (0)20 3147 1861 + 44 (0)20 3147 1207 +6281283158937 richa.walia@eu.jll.com tom.carroll@eu.jll.com james.taylor@apac.jll.com David Barnett Christian Beaudoin Marie Puybaraud Director, Corporate research Americas Head of Corporate research, Americas Global head of Corporate research +1 760-828-2116 +1 312-228-2020 +33153816424 david.barnett@am.jll.com christian.beaudoin@am.jll.com marie.puybaraud@eu.jll.com © 2020 Jones Lang LaSalle IP. Inc. All rights reserved.
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