Late last week, JLL released its 2022 The Future of Work Survey, providing insight into the transformation of the real estate industry in a post-pandemic setting. The survey includes responses from over 1,000 CRE corporate leaders across the globe, and industry sentiment regarding workplace strategy over the next three years.
The survey concludes hybrid workplace model is likely to continue, and says that with calls for the rejuvenation of the office, investing in “quality space” will be prioritized more than office footprint expansion (40% strongly agree to this).
It also found that future portfolios will likely be formed on environmental and social aspirations, and says that CRE will need to focus on technology investments due to rising complexity and sophistication within the real estate industry.
The report highlights this, finding that respondents show an equal interest (around 40%) in sustainability strategy, health and wellbeing, CRE tech solutions, renewable energy supply, and sourcing and sustainability program management.
Priorities dictate strategies investments
The survey answers also suggest that the three years from 2022 until 2025 will determine the success of a company in terms of CRE strategy and adapting to changes.
The key findings of the survey are based on the premise that organizations are accelerating their strategic investments in order to execute long-term workplace and workforce goals.
The answers vary with priorities, improving diversity and inclusion in the workplace (50%) listed as the top priority for executives, followed by workplace design to boost employee engagement and wellbeing (49%), accessing materials in a responsible way and localizing supply chains (44%), providing health and wellbeing amenities (43%) and improving the air quality inside the office (40%).
The office and work from home balance
Most respondents also believe hybrid work model impacts organizations in attracting and retaining employees (77% of the respondents believe this).
More than half (53%) think remote work will become permanent by 2025, with another significant portion believing office spaces will only be for collaborative work (45%). A bulk of the answers (73%) indicate plans on making open office spaces with no designated desk areas.
In addition, most companies with less than 5,000 employees have already implemented or are likely to implement permanent remote work by 2025 (51%). This compares to 56% of companies with more than 10,000 employees that said they have or will make such a work model available to its employees by 2025.
Changes in CRE functions
The survey also questioned which strategic objectives are most important to CRE functions between 2022 and 2025.
Companies with more than 10,000 employees placed the most importance on hybrid work models, support agility and flexibility (65%). Smaller companies with less than 5,000 employees instead prioritized (60%) physical and mental health. Mid-size companies, those with 5,000 to 10,000 people, stated desire to revise portfolio strategies to suit the current market, sustainability objectives and workforce preferences.
Environmental and social aspirations
Another key finding in the survey is how organizations are increasing their investments in ESG solutions to cater to environmental and social aspirations, and demands of their employees.
About 77% said employees expect the workplace to have a positive impact on the environment, with three of four companies saying they would likely pay a premium for green credentials, with more than half planning to do so by 2025.
Around 80% of the respondents believe their organization is already taking steps to make their workplaces inclusive and diverse, and 46% of CRE leaders stated plans to invest in these strategies moving forward.
These include operating facilities in a more carbon-efficient manner (46%) with investments to improve the carbon efficiency, new location selection with 43% of respondents focusing on embedding net zero carbon requirements. Meanwhile 37% of respondents are planning investments which rely on circular design principles, with 36% stating they want to exit less carbon-efficient space.
CRE functions need technology investments
According to the survey nearly 60% respondents said they either do not regularly capture or report data or do it intermittently (42% of the companies capture and report data intermittently).
Only 13% respondents claimed to capture technology investment data in real-time, showing most organizations are still at an early stage for CRE data collection and analysis.
More than half (55%) want to introduce immersive technologies and virtual reality by 2025, and 52% are planning smart contracts with blockchain security. Moreover, 51% want industrial robots for maintenance services and 45% aim to invest in workplace optimization through technology.
Real estate needs are becoming complex
The key results for this category include meeting outsourcing requirements to support health and wellbeing services through 2025 (44%), and the needs of renewable energy and sustainability program management (42%).
Recently, Trepp, a CRE-based proptech company released its annual CRE sentiment survey results. It focused on macroeconomic conditions like inflation and interest rate hikes, and how CRE will be able to avoid the worst of the “upcoming economic headwinds.”
The key findings of the survey predict the office sector will see an increase in distress until the end of 2022 (70%), CRE and CMBS (commercial mortgage-backed securities) worsening in the next six months (83%), working from an office for at least three days a week (70%), and that multifamily transactions will have the most activity within the next six months (58%).
In other recent proptech news, PropTech Breakthrough announced its annual PropTech Breakthrough Awards. FinLedger also spoke with Amy Weissberger, senior vice president of corporate strategy at Morgan Properties about new technology and expansion at the company.