jll 10 trends for cre 2017 -...
TRANSCRIPT
Volatility Agility Optimisation Smart growth Open innovation
Algorithmic business
Human experience
Intelligent automation
Human cloud Better tomorrow
JLL 10 Trends for CRE 2017
VolatilityUncertainty, risks and transparency
82%
Source: 20th CEO Survey, PwC 2017
of CEOs globally are concerned about uncertain economic growth.
74%
of CEOs globally report geo-political uncertainty as a threat to their organisation’s growth.
61%
of CEOs globally are concerned about cyber threats.
Source: Cybercrime Report, Cybersecurity Ventures, 2016
$6 trillionEstimated annual cybercrime damage cost by 2021.
Geo-political & macro economic risks concerning CEOs
Transparency improved in two-thirds of markets since 2014.
42 out of 109 markets have low transparency or are opaque.
Deploy strategies to mitigate risks stemming from volatility across portfolio and operations
©JLL 2017 3
Managing transparency
MENU
Volatile operating environment will challenge corporates in 2017.
Source: 2017 Predictions: Dynamics That Will Shape The Future In The Age of The Customer, Forrester, 2017
500,000IoT devices will suffer a compromise in 2017.
Some ‘Highly Transparent markets could turn ‘Hyper-Transparent’ by 2018.Source: Global Real Estate Transparency Index, JLL, 2016
AgilityCapability to rapidly change or adapt
Agility will drive performance in 2017.
30%
of corporate portfolios will comprise flexible workspace by 2030.
Source: Workspace reworked, JLL, 2016
20M
Source: Three workplaces for the future, JLL, 2013
20 million people worldwide are using third places for part of their workweeks.
34%
of time in the office is spent away from their workstations –in workspaces of colleagues, meetings rooms, spaces for informal communication, etc.
Source: Human Experience Survey, JLL, 2017
Source: Workspace reworked, JLL 2016
Workplace• Flexible design• Modular• Adaptive
Portfolio• Core-flex mix• Co-working• Flexible lease terms
©JLL 2017 4MENU
Incorporate agility as an integral part of workplace, portfolio and asset strategy
Talent and skills
Real estate
Clusters
Regulation and
taxationAccessibility
New visions
CitydynamismOptimisation
Finding an alternative with the highest achievable performance
Location and portfolio strategies will be under intense scrutiny.
50%OVER
of the world’s 30most dynamic citiesand real estatemarkets are in AsiaPacific.Source: City Momentum Index, JLL, 2017
Geo-Political andoperating volatilitywill drive CREoptimisation.
Seven common drivers of location decisions
©JLL 2017 5MENU
57%of talent acquisitionleaders citedcompetition for talentas their top challenge.Source: Global Recruiting Trends, LinkedIn, 2017
1 Bangalore 16 Sydney
2 Ho Chi Minh City 17 Paris
3 Silicon Valley 18 Chennai
4 Shanghai 19 Manila
5 Hyderabad 20 Seattle
6 London 21 San Francisco
7 Austin 22 Shenzhen
8 Hanoi 23 Delhi
9 Boston 24 Raleigh-Durham
10 Nairobi 25 Mumbai
11 Dubai 26 Hangzhou
12 Melbourne 27 Los Angeles
13 Pune 28 Dublin
14 New York 29 Nanjing
15 Beijing 30 Stockholm
• Americas • Asia Pacific • EMEA
The world’s 30 most dynamic cities
Maximise corporate value chain efficiency to increase competitiveness
Source: The promise and perils of location decisions, JLL, 2017
Smart growthIntelligent and sustainable growth
Selective M&A and collaborative growth will define CRE priorities in 2017.
Source: Global Capital Confidence Barometer, E&Y 2016
57% of companies are actively reorganising their business.Startups and fast growth tech innovators are in focus.
Emerging markets-related M&A is expected to increase by more than 50% by 2018.Source: Baker McKenzie, 2015
Plans to drive shareholder value for the next 3 years
55%
55%
58%
Inorganicgrowth
Organicgrowth
Collaborative growth
Source: Global CEO Outlook, KPMG 2016
25%25%
33%34%
38%
Western EuropeAustralia
United StatesChinaIndia
Greatest potential for new market growth over the next 3 years
©JLL 2017 6MENU
Realign CRE team and processes to support smart growth objectives
Open innovationCombine new thinking, solutions and processes to drive value creation and accelerate business transformation
CRE will need to support open innovation and collaboration.
Source: Global CEO Outlook, KPMG 2016
of CEOs intend to drive shareholder value through collaboration over the next 3 years.
58%
Collaboration
Innovation:
Core HQ
Co-working
Virtual collaboration
Accelerator
Centre of excellence
Fab labs
Incubator
Innovative companies across the world generate higher total shareholder returns compared to their peers.Source: The Boston Consulting Group, Accenture 2015, CoreNet 2015
©JLL 2017 7MENU
Model for open innovation
42%of companies expect collaboration with entrepreneurs to accelerate disruptive innovation.
63%of companies say the main reason for using shared office space is the ability to collaborate.Source: The Boston Consulting Group, Accenture 2015, CoreNet 2015
Make continuous innovation a core component of strategy to drive product and human performance and deliver high return on investment
Human experienceFusion of work and life driven through engagement, empowerment & fulfilment
A place of work is more than just a property. It’s an environment that can help individuals and businesses achieve their business ambitions.
Source: Human Experience Survey, JLL, 2017
Engagement: sense of commitment
©JLL 2017 8MENU
40% of people globally feel very engaged at work.
54% of work from home at least one day a month.
Empowerment: sense of control
Health and wellbeing perceived to have the highest impact on engagement at work.
Fulfilment: sense of comfort
#1
Embed ‘user experience’ at the forefront of workplace strategy through people-centric approach
Human cloudDigital talent platform
The human cloud and contingent workers will shift demand for CRE.
Source: A labor market that works, McKinsey 2015
Online talent platforms can increase a company’s output by up to 9% and lower costs related to talent and human resources by up to 7%.
or nearly 2% could be added to global GDP by 2025 through online talent platforms.Source: A labor market that works: connecting talent with opportunity in the digital age, McKinsey, 2015
$2.7 trillion The growth of contingent workers has the potential to inversely impact headcount and, therefore, real estate needs.
©JLL 2017 9
Source: Workspace, reworked, JLL, 2016
MENU
Core workforce:Employees
Contingent workforce:Specialists and freelancers
Autonomous:Independent workers/robots
Adapt CRE strategy to meet contingent workforce demand and integrate human cloud concepts
Intelligent automationCombination of artificial intelligence and automation
Automation is redefining roles and business processes.
85% of CEO’s are considering theintegration of basic automatedbusiness processes with artificialintelligence and cognitive processesover the next three years.Source: Global CEO Outlook, KPMG 2016
Process• 25% of tasks across every job
category will be automated by 2019
Source: People, change and robots, PwC 2016
Portfolio• Optimise data
management• Increase
transparency • Provide advanced
business analytics
Job transformation• 9% of jobs are at risk of
being totally automated• 50% and 70% radically
transformed Source: Automation and Independent Work in a Digital Economy, OECD, 2016
Operations• Building
management• Routine facilities
maintenance and services
Capital• Digitise workflow• Construction
processes• On-site inspection
©JLL 2017 10MENU
Leverage intelligent automation to transform CRE service delivery across the real estate life cycle
By 2018, more than 50% of large organisations globally will compete using advanced analytics and proprietary algorithms, causing the disruption of entire industries.Source: Five Keys to Understanding Algorithmic Business, Gartner, 2016
Cost savings
Algorithmic real estate =
Data-driven insights
Competitive advantage
Better human
experience
Increased productivity
Operational excellence
©JLL 2017 11
Mitigate risks
MENU
Algorithmic businessIndustrialised use of algorithms to drive performance driven portfolios and operational success
Digital business revolution will impact real estate.
Harness the power of AI and predictive data analytics to improve real estate performance
Source: Are Smart Buildings Smart for Business?, JLL 2016
Better tomorrowCreating sustainable business models that add lasting value to customers, employees, shareholders and communities.
Corporate philanthropy will increase in importance in 2017.
©JLL 2017 12
Source: 17th Annual Global CEO Survey, PwC
of CEOs agreedthat measuring andreporting the ‘totalimpact’ of theircompany’s activitiescontributes to long-term success.
75%EnvironmentDeveloping new assets to meet low or zero carbon standards and retrofitting existing assets.Source: The Big Eight for Real Estate, JLL 2015
Health & well-beingPeople working in a green office report higher cognitive function than those working in a conventional office by as much as 61%.Source: Harvard T.H. Chan School of Public Health, 2015
Community Minimise the sustainability impacts of supply chains and procurement practices to influence communities more broadly. Source: Building a Better Tomorrow, JLL, 2016
DiversityIncreasing expectations from CRE to drive engagement and inclusion through workplace design.
MENU
Accelerate corporate commitment to community and diversity
©JLL 2017 13
Report contact: JLL research leads:Richa WaliaSenior Research Analyst, EMEA+44 (0)20 3147 [email protected]
Tom CarrollHead of Corporate Solutions Research, EMEA+44 (0)20 3147 [email protected]
Susan SutherlandHead of Corporate Solutions Research, Asia Pacific+65 9771 [email protected]
Christian BeaudoinHead of Corporate Solutions Research, Americas+1 (312)228-2020 [email protected]
Marie PuybaraudGlobal Head of Corporate Solutions [email protected]
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. A Fortune 500 company, JLL helps real estate owners, occupiers and investors achieve their business ambitions. In 2016, JLL had revenue of $6.8 billion and fee revenue of $5.8 billion and, on behalf of clients, managed 4.4 billion square feet, or 409 million square meters, and completed sales acquisitions and finance transactions of approximately $136 billion. At year-end 2016, JLL had nearly 300 corporate offices, operations in over 80 countries and a global workforce of more than 77,000. As of December 31, 2016, LaSalle Investment Management has $60.1 billion of real estate under asset management. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit www.jll.com.