Four Key Imperatives Shaping the Future of Real Estate
In a recent research report titled “The future of real estate: New perspectives on a fast-changing world from JLL’s Future Vision program,” JLL, a leading global commercial real estate firm, identified four critical imperatives that will significantly impact the real estate industry in the coming years. These imperatives are climate, people, technology, and resilience. (JLL Research, 2024)
- Climate Imperative: As heatwaves, flooding, and droughts become more frequent, buildings will need to be designed and constructed to withstand greater damage and disruption. Carbon regulation and the repricing of risk will become more widespread, and minimizing environmental impact will be a default requirement for all buildings and asset classes. (JLL Research, 2024)
- People Imperative: The way people live and work continues to evolve, influencing the real estate industry. Companies and governments will place a growing emphasis on social impact, leading to the development of multi-functional, mixed-use environments that incorporate wellness, hospitality, and entertainment. (JLL Research, 2024)
- Technology Imperative: The implementation of AI, quantum computing, and robotics is expected to accelerate, transforming the built environment into an interconnected ecosystem. Advanced automation, intelligent materials, and digital twins will revolutionize the construction and operation of buildings. (JLL Research, 2024)
- Resilience Imperative: Real estate investors and occupiers will need to develop more resilient strategies to address the challenges posed by climate change, technology, and demographic shifts. This includes building more versatile real estate, enhancing risk management through scenario planning and stress-testing, and diversifying portfolios across geographies, sectors, and industries. (JLL Research, 2024)
Impact on Real Estate Valuation:
These four imperatives will likely have significant implications for real estate valuation. Properties that are more resilient to climate risks, incorporate sustainable features, and minimize environmental impact may command higher values. Buildings that offer adaptable, multi-functional spaces catering to the evolving needs of people and businesses could also see increased demand. As technology advances, properties equipped with smart systems, advanced infrastructure, and the ability to accommodate AI and robotics may be more highly valued. Lastly, real estate assets that demonstrate resilience through diversification, risk management, and adaptability to changing market conditions may be more attractive to investors, potentially impacting their valuation. (Appraiser’s analysis based on JLL Research, 2024)
Source:
JLL Research. (2024). The future of real estate: New perspectives on a fast-changing world from JLL’s Future Vision program.
