Yahoo Finance Corporate real estate teams are shifting focus from operations to driving business value, report finds
Corporate Real Estate (CRE) teams are facing mounting pressure to demonstrate the value of their investments as their companies prepare for expansion in the coming years, according to a report from global real estate services firm Jones Lang LaSalle Inc. (JLL).
JLL’s newly released 2024 Future of Work survey found that 65 per cent of decision-makers anticipate an increase in their CRE budgets by 2030, and 62 per cent identified “achieving better utilization of their CRE portfolio” as a top priority.
However, JLL found that CRE teams are grappling with a long-standing perception that hinders their transformation efforts. In the survey, 41 per cent of decision-makers said overcoming the view that CRE is merely a “cost centre, rather than a value driver” was a challenge.
At the same time, many CRE teams are finding it difficult to plan for the future due to the rapidly changing business environment. Forty-one per cent said they face challenges “with thinking and investing for the long term,” which JLL said underscores the need for CRE teams to develop flexibility, agility, and resilience — skills that are now seen as crucial for delivering real value.
The real estate firm, which has offices in more than 80 countries, said a key part of overcoming these challenges lies in leveraging data more effectively. Access to relevant information will allow CRE professionals to better communicate with the C-suite or senior executives and highlight areas for strategic investment. JLL believes that the right metrics can help CRE teams demonstrate their contribution to business growth and shift the conversation from cost management to value creation.
Beyond data and metrics, JLL found that stronger collaboration with other business units will be critical. As the report notes, aligning CRE with a company’s broader strategy will “ensure a coordinated approach, greater alignment, and the ability to respond quickly to changes in business priorities.”
JLL predicts that by 2030, more CRE decision-makers will report to business transformation or technology teams rather than traditional finance or operations departments. According to JLL, this shift signals the growing importance of CRE in the broader business transformation agenda.
Real estate investing has taken a hit, but not all markets are the same
RioCan profit rises on record-breaking leasing spreads, resilient tenant mix
“Influencing and leadership will be critical in the future,” JLL stated, while explaining that CRE professionals will need to step into strategic roles as they guide their organizations through an evolving business landscape.
• Email: shcampbell@postmedia.com
Bookmark our website and support our journalism: Don’t miss the business news you need to know — add financialpost.com to your bookmarks and sign up for our newsletters here.
