Global CRE trends 2018 - Marie Puybaraud Global Head of Research JLL Corporate Solutions

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Global CRE trends 2018 - Marie Puybaraud Global Head of Research JLL Corporate Solutions
Global CRE trends
2018

Marie Puybaraud
Global Head of Research
JLL Corporate Solutions

©JLL 2016                 1
Global CRE trends 2018 - Marie Puybaraud Global Head of Research JLL Corporate Solutions
Top 10 CRE Trends for 2018

   Dynamic workforce                                          Flexspace              Innovation culture               Digital drive             Smart real estate

 Rapidly changing workforce                               Coworking and flexible      A work environment           Harness digitisation and       Digitally enabled
        environment                                           workspaces           supporting creativity, cross-         rich data                   real estate
                                                                                       collaboration and
                                                                                            innovation

Adaptive organisation                                      Future skilling                 Wellness                   Humanisation                 Community

     Responsiveness to a                             Rethinking skills base and    Being in good health as an         Reintroducing the              Nurturing a
  rapidly changing operating                                  profiles               actively pursued goal           human factor at the              network of
          environment                                                                                               core of the enterprise    interdependent individuals

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Global CRE trends 2018 - Marie Puybaraud Global Head of Research JLL Corporate Solutions
Portfolio career                                                       Liquid workforce
                                                                                                                                     Between 20% and 30% of the working
                                                                                                                                     population is already working in the on-
                                                                                                                                     demand or gig economy.
                                                                        80%                                60%                       Source: Independent Work: Choice, Necessity and the
                                                                                                                                     Gig Economy, Mckinsey, 2016

                                                           of all employees during             of the workforce nowadays             Coworking
                                                           the 1980’s worked for the           switches employers after
                                                                                               only four.                            of
Flexible working                                     Workplace utilisation

                                                                                                                 About 30-40% of space is underutilised
                                                                         of employees work from home at          during a typical workday.
                                                              54%        least once a month.                     Source: Occupancy Planning Annual Report, JLL 2017

                                                                                                                Supply side growth
                                                                         of employees say access to                        No. of coworking spaces worldwide
                                                                         external co-working spaces has a         16 000
                                                                         positive or a very positive impact                                                                 13 800
                                                             >60%                                                 14 000
Coworking and flexible                                                   on their engagement and                                                                   11 300
                                                                                                                  12 000
workspaces                                                               productivity at work.
                                                                                                                  10 000                                   8 700
                                                                                                                   8 000
                                                                                                                                                   5 800
                                                                         of employees work at least once a         6 000
                                                                                                                                           3 600
The proportion of flexspace                                              month from third places such as           4 000
                                                                                                                                   2 070

within CRE portfolios will                                    34%        internet cafes, public libraries or       2 000   1 130

                                                                         co-working spaces.                           0
continue to grow in 2018.                                                Source: Human Experience, JLL, 2017
                                                                                                                           2011    2012    2013    2014    2015    2016     2017
                                                                                                                 Source: Coworking Survey, Deskmag, 2017

                                                                 Incorporate flex-space as a core part of workplace and portfolio strategy.
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Cross-Collaboration                                        Operating models for innovation

                                                                           of CEOs plan to enter new                                  Open innovation                            61%
                                                                           strategic alliance or joint venture.
                                                               48%         Source: 20th Annual CEO survey,                             Design thinking                           59%
                                                                           PwC, 2017                                     Co-creating with customers,
                                                                                                                             partners, suppliers                              55%
                                                                                                                                       Traditional R&D                 34%
                                                                                                                     Innovating in emerging markets,
                                                                                                                     exporting to developed markets                    34%
                                                                                                                       Taking risks, failing fast, trying
                                                                                                                                    again                              31%
A work environment supporting                              Open Innovation                                                          Internal incubators              27%
creativity, cross-collaboration
                                                                                                                             Investing in start-ups via
and innovation                                                             of large companies stated that                    corporate venture capital             21%
                                                                           open innovation is important or
                                                                           critical to higher levels of future
New collaboration                                              97%         business performance.                      Q: what operating models does your organization currently use to
imperatives are changing                                                   Source: Building a Digital Ecosystem:
                                                                                                                      drive innovation? Percentages denote the number of companies
                                                                                                                      using these innovation models.
                                                                           Collaborate for Growth, Accenture, 2017
corporate innovation                                                                                                  Source: PwC’s Innovation Benchmark; Base: 1,222

infrastructure.                                                                                                       Source: Innovation Benchmark, PwC, 2017

                                                                Review innovation infrastructure to foster hyper-collaboration within
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                                                                and outside the organization.                                                                             Menu      5
IoT investment                                               Digital drivers
                                                            1 000            832                                               To meet changing
                                                                                    IoT investments by businesses                                                                         80%
                                                                                                                             customer expectations
                                                                                    are projected to grow dramatically

                                                           $M
                                                                500
                                                                      215           over the next few years.                 To improve operational
                                                                                                                                                                              52%
                                                                                    Source: Leveraging the Upcoming                efficiency
                                                                  0                 Disruptions From AI and IoT, PwC, 2017
                                                                      2015   2020                                             To reinvent business /
                                                                                                                                                                            47%
                                                                                                                                operating model

                                                                                                                             To create new products
                                                                                                                                                                          41%
Harness digitisation                                                                                                               or services
and rich data                                                   AI Investment
                                                                                                                                                        0% 20% 40% 60% 80% 100%
                                                                                    of executives report they will
                                                                                    invest extensively in AI-related         Q: Why companies feel the need for digital transformation.
                                                                                    technologies over the next
Integrated technology and                                             85%           three years.
                                                                                                                             (Survey of leaders responsible for digital transformation
                                                                                                                             initiatives).
ecosystems will drive new                                                           Source: Technology Vision, Accenture,    Source: Digital Trends Report, Nimbus Ninety, 2017
levels of enterprise                                                                2017

performance.

                                                                        Align CRE strategy with enterprise-wide digital transformation.
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“Traditional real estate organisations need to engage with PropTech
                                                               companies in order to adapt to the changing global environment.”

                                                           Technology partnerships                              Return on investment

                                                                            of real estate decision makers
                                                               89%          agree with the statement

Digitally enabled                                                                                                                    81%
real estate
                                                                            of real estate decision makers
                                                                            expect to collaborate with an
Smart real estate                                                           existing or new supplier to
                                                                            develop their technological         of occupants report that smart buildings
technology is transforming                                     49%          innovation capability.              improve employee retention.
the real estate life cycle.                                                 Source: Bridging the gap, Global    Source: Smart Buildings Decoded, BPIE 2017
                                                                            PropTech Survey, KPMG 2017

                                                                 Deploy emerging smart real estate solutions to optimise user-experience
 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
                                                                 and enhance enterprise performance.                                                         Menu   7
Agility                                                                  Drivers
                                                                                                                                     Why Businesses should improve agility?
                                                                                              of companies report that “agility      Management-level executives rated the top
                                                                                              and collaboration” are critical to     reasons for improving agility.
                                                                                              their organization’s success, yet
                                                                        94%                   only 6% say that they are “highly
                                                                                              agile” today.
                                                                                              Source: Global Human Capital Trends,
                                                                                              Deloitte, 2017

                                                            Key obstacles to digital transformation                                     84%                   65%                    58%
Responsiveness to a rapidly                                                                                                          believe the          expect higher          expect higher
                                                                   Lack of properly skilled teams                           63%
changing operating                                                                                                                   capability to        customer               employee
                                                                           Outdated technologies                           61%
environment                                                                                                                          respond more         satisfaction           productivity and
                                                           Lack of integration of new and existing
                                                                   technologies and data                                  59%        quickly to new       and retention.         retention.
                                                                                                                                     opportunities will
                                                                     Inflexible or slow processes                   42%
Nurture an agile culture                                    Lack of collaboartion between IT and
                                                                                                                                     give them a
                                                                                                                 35%                 distinct
and workplace against the                                                 business
                                                                                                                                     advantage.
backdrop of market and                                     What’s stalling digital transformation efforts?                           Source: The State of Business Agility, CA
                                                                                                                                     Technologies, 2017
digital transformation.                                    Source: Global Digital IQ Survey, PwC, 2017

                                                                          Embed agility in the organisation to seize new opportunities and respond
 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
                                                                          to a volatile operating environment.                                                                       Menu    8
Changing profiles                                         Talent strategy
                                                                                                                     Top approaches to get sufficient talent to
                                                                            of HR professionals say that skills      support business strategy:
                                                                            needed for jobs in their
                                                                            organisation are changing.
                                                                65%                                                       59%
                                                                            Source: Resourcing and Talent Planning
                                                                            Survey, CIPD / Hays, 2017

                                                                                                                                            52%
                                                                                                                                                             51%
Rethinking skills base and
profiles                                                   Retrain or redesign
                                                                            of companies will either retrain
                                                                            people to use technology or will
                                                                                                                      Develop and        Recruit new Hire contractors
                                                                            redesign jobs to better take
Adapting team                                                   77%         advantage of human skills.
                                                                                                                      train existing     employees and consultants
                                                                                                                       employees
competencies to meet                                                        Source: Global Human Capital Trends,     Source: Digital Business Global Executive Study,
future CRE challenges.                                                      Deloitte, 2017                           Deloitte, 2017

                                                                 Consider new and atypical profiles to drive the future of your
 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
                                                                 organisation and enhance CRE performance.                                                        Menu   9
Current state                                                                 Desired state
                                                           Only about 9.5% of today’s workforce is covered by any                         Switching off and                  Happiness at work
                                                           kind of workplace wellness programs or services.                               meditation
                                                           Source: Global Wellness Economy Monitor, GWI, 2017

                                                           According to WHO, by 2030 the largest health risk on earth                          25%                                  69%
                                                           will be depression. The global economic impact of mental
                                                           health is estimated at US$ 1 trillion per year in lost
                                                           productivity.                                                                 Q: What criteria would give you the feeling of having a unique
                                                                                                                                         experience of work?
                                                           Source: Global Wellness Summit, WHO, 2017
                                                                                                                                          Source: Human Experience, JLL 2017
Being in good health as an
actively pursued goal                                                                                      Wellness Architecture
                                                                                                                                                                                          International
                                                                    Indoor air quality                                    Daylighting                      Noise and
                                                                                                   Thermal comfort                                                                        layout and active
                                                                    and ventilation                                       and lighting                     acoustics
                                                                                                                                                                                          design
Support mental and
physical health at work by                                                   Biophilia and views               Look and
                                                                                                                                     Location and access
                                                                                                                                                                          Employee
                                                                                                                                     to amenities
aligning workplace and HR                                                                                      feel                                                       engagement

strategy.                                                  Source: “Building The Business Case: Health, Wellbeing and Productivity in Green Offices”, World Green Building Council, October 2016

                                                                      Create a new wellness architecture to activate and sustain human experience.
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Automation                                                Humanisation
                                                           In the period 2018-2020 the expected                       Only 22% of executives reported that their
                                                           annual growth rate of sales in service                     companies were excellent at building a
                                                           robots for professional use is expected to                 differentiated employee experience.
Reintroducing the human                                    between 20% and 25%.                                        Source: Digital Mobility | Talent 2017 Trends,
factor at the core of the                                                                                              Deloitte, 2017
                                                           Source: World Robotics, International Federation of
enterprise                                                 Robotics 2017

Create workplaces that
are people orientated,
experiential and
personalized.

                                                                      Enhance human experience while building on the potential of
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                                                                      automation and digitization.                                                                Menu   11
Building trust                                           Impact on employees

                                                                   61%                                                          58%

                                                           of CEOs say building greater trust among external        report a positive impact on engagement and
                                                           stakeholders and customers is a top three priority for   productivity.
A network of                                               their organisation today.                                Q: Does access to spaces for shared community interests (vegetable
interdependent individuals                                 Source: Global CEO Survey, KPMG, 2017
                                                                                                                    gardens, spaces for artistic expression, spaces for leaving pets, etc.) have
                                                                                                                    an impact on your engagement with the company and productivity?

Buildings to become an
                                                                                                                    Source: Human Experience, JLL, 2017
epicentre for communities to
share passions, experiences
and ideas.

                                                                     Meet community aspirations by seamlessly connecting people and
 © 2018 Jones Lang LaSalle IP, Inc. All rights reserved.
                                                                     creating comfortable spaces.                                                                                   Menu       12
Act now and don’t be left behind!
 Dynamic workforce          Flexspace            Innovation culture            Digital drive             Smart real estate

     Adopt a user-          Incorporate flex-       Review innovation         Align CRE strategy          Deploy emerging smart
   centric approach to    space as a core part    infrastructure to foster    with enterprise-wide        real estate solutions to
      respond to a         of workplace and         hyper-collaboration               digital            optimise user-experience
   dynamic workforce.      portfolio strategy.    within and outside the         transformation.          and enhance enterprise
                                                       organization.                                           performance.

Adaptive organisation Future skilling                 Wellness                Humanisation                  Community

  Embed agility in the    Consider new and                                       Enhance human              Meet community
                                                       Create a new
  organisation to seize   atypical profiles to                                   experience while            aspirations by
                                                   wellness architecture
 new opportunities and    drive the future of                                building on the potential   seamlessly connecting
                                                  to activate and sustain
  respond to a volatile   your organisation                                     of automation and         people and creating
                                                    human experience.
 operating environment.   and enhance CRE                                           digitization.         comfortable spaces.
                            performance.
Contact

        Marie Puybaraud, PhD
        Global Head of Research
        JLL Corporate Solutions
        Mob : +33 (0) 632 879 748
        Marie.puybaraud@eu.jll.com

        www.futureofwork.jll
        www.humanexperience.jll
                                                                                 WEF 2018 – The Future of Workplace
                                                          http://www.jll.com/Documents/JLL_Future_Of_Workplace_Human_Experience_1.pdf

© 2018 Jones Lang LaSalle IP, Inc. All rights reserved.                                                                        13
© 2018 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to JLL and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the
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