Key real estate sector priorities identified by JLL to achieve just recovery

JLL believes that these key real estate sector priorities are critical to transforming real estate and delivering long-term resilience for the sector.

JLL highlighted that against the complex backdrop of Covid-19 there has been some cause for optimism, including a continued commitment to sustainability within the real estate sector. According to a survey undertaken by the BPF, supported by JLL, over 70% of respondents said that the delivery of sustainability initiatives has continued to be ‘business as usual’ and in some cases has even increased over the last five months. Furthermore, over 35% of the respondents said that they plan to accelerate activity and investment in sustainability as we emerge out of the pandemic.

Sophie Walker, UK head of sustainability at JLL, said: “When faced with adversity, human nature often delivers amazing outcomes. In 2020 we have witnessed both the fragility of our systems and the incredible warmth of community spirit. With the benefit of hindsight and the experience of this generation living through a global crisis, we must use this time to learn lessons and rebuild our businesses and communities for the sustainable, just society we all want.”

As we emerge from the crisis, JLL urged all businesses in the real estate sector to align their strategies with the following priorities:

1. Ensuring climate resilience and accelerating the net zero carbon transition – With the 2020s already predicted to be the decade of net zero carbon delivery, Covid-19 has heightened our collective understanding of risk and the need for rapid action. JLL now considers that businesses need to adopt a total systems approach to net zero carbon; prioritise investment into net zero carbon technology solutions; manage climate risk in underwriting and investing; and finally recognise the social risks from climate change and the absolute necessity of delivering a ‘socially just transition’.

2. Enabling healthy people and environments – As Covid-19 poses fundamental questions about the way we live and work, companies are prioritising their most valuable asset – their people – more than ever. This renewed focus on people’s health and wellbeing should include: the delivery of site level actions to enhance wellbeing; the adoption of an evidence-based approach to wellbeing; prioritisation of investment into technology solutions to deliver well-being performance and a focus on local community well-being.

3. Creating a fair, inclusive and resilient society – Covid-19 has exacerbated existing inequalities and demands for a fair, inclusive and resilient society are rightly intensifying. Organisations must respond meaningfully and transparently and focus on: leading with social purpose; developing a deep understanding of social risks and opportunities; investing to drive impact; and ensuring a genuine commitment to equality and inclusion.

Chris Ireland, JLL UK CEO, concluded: “Real estate has a real impact on our everyday lives and will play an even more fundamental role as we recover and adjust to the ‘new normal’. Buildings are where people live, work, shop, eat, socialise and heal. The long lockdown period has demonstrated how much we rely on a healthy and safe home, a supportive community, robust hospitals, and efficient logistics hubs to supply food and goods. The ‘new normal’ must be better, more resilient, more connected and led and supported by strong and committed leadership. In this report, we explore a vision for a sustainable and just world. And we look at the role of the property sector in turning this vision to reality.”

In another report, JLL finds 93% of corporate real estate leaders believe their recovery plans to mitigate the impact of the pandemic will be successful. Corporate real estate (CRE) leaders in the Asia Pacific are optimistic about their business and recovery plans despite impact from the ongoing pandemic, it said.

At least nine in ten believe that these plans to mitigate the impact of COVID-19 will be successful and have faith in their workforce to cope with the current crisis. A majority of leaders also expect total footprint and number of sites that they maintain to remain the same or even increase.

According to JLL , corporate real estate leaders are now moving forward confidently in reimagining the new modern office, with a huge focus placed on prioritizing the health and wellness of employees, as well as leveraging technology in their investments plans.

In the report titled “Optimism in the Face of Crisis”, corporate real estate leaders are highly positive about the future state of their business. Nearly 80% are confident they have the right CRE service partner to advise on next steps, and 70% are assured in their governments’ ability to advise and take the right measures to mitigate future risk. Looking back at the effectiveness of their business continuity plans, CRE leaders expressed high levels of satisfaction, and 88% judged their plans to be effective, very effective or extremely effective.

While the majority (76%) of corporate real estate leaders across the region expect only moderate impact or steady rationalization (i.e. expansion or contraction) of their real estate portfolios in response to changes arising from COVID-19, not all of them in Asia Pacific view this the same way.