Top CRE Trends 2021 Corporate Solutions - JLL

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Top CRE Trends 2021 Corporate Solutions - JLL
Corporate Solutions

Top CRE Trends
2021
Top CRE Trends 2021 Corporate Solutions - JLL
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
Top CRE Trends 2021 Corporate Solutions - JLL
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

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