The future of real estate

Image by bmf-foto.de - stock.adobe.com. This work product was created with assistance from generative AI.

What will our cities look like in the future? How will we keep up with all the rapid changes to how we live, work, invest and spend our free time? How will the built environment need to change to prepare for the different future scenarios that may lie ahead?

These are the broad questions being explored in the new JLL Future Vision program, an ambitious research initiative incorporating the perspectives of experts from a wide range of disciplines, from demography to anthropology and urban planning.

JLL Future Vision combines:
 

• JLL’s robust, long-term exploration of megatrends: Our network of 500 researchers across the globe have sought to uncover what will matter most to the real estate industry in the coming years.

  
  

• Thought-provoking input from a multi-disciplinary forum of future thinkers: We identify the meaningful signals that will shape our societies and the built environment.

  
  

Technology, climate change, demographic and societal shifts: there are few times in human history where so many major changes are colliding.

The built environment is often right at the center of it all. How buildings are designed, and where they are located, now need to factor in climate change. The ways people work – especially in the age of Artificial Intelligence – are reshaping how buildings are used. New technologies – from robotics to 3D printing – are poised to upend how spaces are built and maintained.

Occupiers and investors are preparing for what may come. But what exactly are these possible eventualities?

“Our purpose has not been to forecast what will happen, which can be a fruitless – indeed misleading – activity,” says Steven Lewis, JLL Global Head of Insight. “The focus instead is on a structured, scenario-based approach that enables planning for multiple futures by identifying what real estate companies must do now to capitalize on all eventualities and start pivoting as the future takes shape.”

Read on for a sample of what we discovered in relation to the four imperatives, and the questions business leaders need to be considering.

The way people live and work has seen dramatic upheaval in recent years. It’s not over, and it will continue to influence the real estate industry. 

Imagine a world where employees in the majority of industries have a greater say regarding when and where they work. AI and advances in robotics impact the type and amount of work that people do. New technologies support increased recreation time, a gamechanger for cities, especially as life expectancy rises. 

Companies and governments will have to put a growing emphasis on social impact, which will be set to play a much bigger role on real estate strategies. We’ll see this playing out in new hybrid workspaces acting as multi-functional, mixed-use environments that incorporate wellness, hospitality, and entertainment. Partnerships between governments and the private sector will encourage more services and spaces that foster community engagement and address equitable access. Housing affordability will become more acute in major cities; the real estate industry will have a key role to play in solving it.

Key questions for investors/occupiers
 

• How will spaces need to be reconfigured to accommodate how AI and robotics will be incorporated into more of how we work and live?
  
• How will the new work-life-play expectations be accommodated? 
• How can real estate “give back to society”, as will increasingly be expected? 
• How might the built environment help drive social cohesion?
• How will new government policies and regulatory requirements aimed at solving affordability, housing shortage, and building vacancy issues impact real estate? What could be the impact for occupational and investment strategies?

Imagine a world where heatwaves, flooding, and droughts will continue to put cities and buildings at risk regularly and everywhere – not just in the most susceptible regions. In this new landscape, carbon regulation and the repricing of risk will be increasingly widespread, alongside strategic shifts to related investments - just like we are seeing in Amsterdam, New York or Singapore today. 

Climate resilience will be key. Minimizing environmental impact will be the default requirement for all buildings and asset classes. AI-powered building control systems and smart materials will play an increasingly large role. Buildings will need to be designed, constructed and configured to withstand greater damage and disruption.

Key questions for investors/occupiers

• What can we do today to reimagine buildings – and how they’re designed - so they’re more resilient to climate change? 
  
• How can infrastructure resilience be ensured alongside building resilience? 
  
• What kind of governance and public-private collaboration needs to be put in place to reduce climate risk? 
• How can occupiers and investors prepare for much stricter regulation and requirements for new and existing buildings?

In the months ahead, we will explore these imperatives and other themes in a series of articles and podcasts. We are starting with deep dives on the climate and technology imperatives – see The Climate Inflection Point and Get set for the 5th Industrial Revolution. An examination of the impact of the future of work on real estate will follow, along with ongoing analysis of the impact of macroeconomic trends on the real estate industry.

In addition to publishing regular articles, JLL Future Vision will provide insights to clients through one-to-one conversations and future workshops. 

Explore more of JLL's latest insights on World Economic Forum themes at our dedicated Davos page.