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Are under increasing pressure to prove the value of their investments in view of their expansion plans
Published September 10, 2024 • 2 minutes reading time
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Office building in downtown Toronto. Photo by Veronica Henri/Toronto Sun/Postmedia Network Files
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Corporate real estate (CRE) teams are under increasing pressure to prove 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).
According to JLL’s recent Future of Work 2024 survey, 65 percent of decision makers expect to increase their CRE budgets by 2030, and 62 percent cited “better utilization of their CRE portfolio” as a top priority.
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However, JLL found that CRE teams struggle with a long-standing perception that is hindering their transformation efforts. In the survey, 41 percent of decision makers said it was challenging to overcome the view that CRE was merely a “cost center and not a value driver.”
At the same time, many CRE teams are struggling to plan for the future due to the rapidly changing business environment. Forty-one percent said they face challenges in “thinking and investing for the long term,” which JLL said underscores the need for CRE teams to develop flexibility, agility and resilience—skills now seen as critical to creating real value.
The real estate company, which has offices in over 80 countries, said a key aspect of addressing these challenges is using data more effectively. Access to relevant information will enable CRE professionals to better communicate with management or senior executives and highlight areas for strategic investment. JLL believes the right metrics can help CRE teams demonstrate their contribution to business growth and shift the conversation from cost management to value creation.
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Beyond data and metrics, JLL says greater collaboration with other business units is critical. As the report notes, aligning CRE with a company's overall 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 as part of the broader business transformation agenda.
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“Influence and leadership will be critical going forward,” JLL said, explaining that CRE professionals must take on strategic roles as they lead their organizations through an evolving business landscape.
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