Commercial property market should be more optimistic, but it still needs to change

JLL’s latest Future of Work Survey claims to reveal new opportunities for the commercial property sector as two-thirds of business leaders expect their CRE budget to rise between now and 2030. Despite challenges in the commercial real estate sector and bumpy economic conditions, global business leaders are optimistic about the future, with two-thirds (65 percent) expecting their CRE budgets to increase by 2030, according to the poll. This survey sets out to explore the evolving nature of work, assessing the key priorities, challenges, and strategies for more than 2,300 business and CRE decision-makers.

This year’s findings are presented in a series of articles exploring crucial areas of focus for corporate real estate teams: managing the impact of shifting work patterns; partnering with the C-suite to support CRE investment; identifying CRE activities for ‘AI co-piloting’; moving from ambition to action on sustainability commitments; and defining the future-fit CRE function. The first two articles, released today, examine the effects of changing work patterns on workplace expectations and what the evolving world of work means for the CRE function, as over 64 percent of leaders anticipate increasing and rebalancing their workforce by 2030, to recruit the necessary skills for the future.

Business leaders are focused on three key goals over the next five years: growing revenue through expansion and M&A (57 percent), attracting and retaining talent (53 percent), and achieving organisational efficiency (54 percent). However, the balance between driving revenue growth through top talent and improving efficiency requires leaders to carefully assess the role of offices in enabling employees to deliver their best work.

Shift back to the office

Since 2022, there has been a strong shift towards office-based work, with 62 percent of respondents expecting to increase their use of office space, and over half planning to expand their footprint in the next five years. Currently, 44 percent of organisations are classified as “office advocates,” aiming to have staff in the office five days a week, compared to 2022, when only 34 percent of employees worked full-time in the office. While hybrid work remains, the office is once again central to working life. Today, 85 percent of organisations require at least three days of office attendance per week, and 43 percent expect in-office days to rise by 2030.

Globally, hybrid work is more prevalent in large organisations in EMEA, where hybrid workstyles are seen as essential to the employee value proposition, particularly in sectors such as e-commerce, energy & renewables, technology, and life sciences. On the other hand, office advocates are generally small-to-medium-sized companies in APAC or the Americas, in sectors such as healthcare, retail, and manufacturing. Beyond these trends, the reality is more complex, with various workstyles coexisting within many organisations.

Today’s ‘office advocates’ are also addressing diverse workplace needs, focusing on creating accessible environments (49 percent vs. 36 percent of hybrid adopters), tailored to the requirements of different generations, cultures, and neurodiversity needs. They may even pay a premium to occupy commercial property with strong health and wellbeing credentials. Additionally, more than a third (39 percent) of respondents could introduce different pay and benefits for employees who regularly attend the office, creating new opportunities for compensation and career progression.

The value that the corporate real estate function can offer varies depending on organisational needs and regional priorities. Globally, business leaders believe commercial property adds the most value by supporting business growth (41 percent), enhancing organisational efficiency (38 percent), and reducing operating costs (37 percent). ESG factors are also an area where CRE is expected to contribute, particularly in EMEA. In the Americas, organisations are more likely to expect CRE to support business growth, innovation, and efficiency, while companies in the Asia Pacific region focus more on digitisation.

These differing expectations require flexibility within CRE functions, especially as 41 percent of CRE decision-makers report difficulties in planning and investing for the long term due to the fast pace of organisational change. The same percentage feel that CRE is perceived as a cost centre rather than a value driver. Identifying the right metrics to demonstrate value, as well as strengthening relationships with the C-suite, will help integrate CRE into the wider business and ensure it can adapt to shifting priorities – 46 percent of CRE leaders say that influence and leadership will be crucial skills in the future.

Technology is also set to have a growing impact on commercial property, with more decision-makers expecting to report to business transformation or technology departments by 2030. CRE leaders predict that 70 percent of their activities will be at least partially supported by AI by 2030, and a quarter of the CRE function could initially be automated – freeing up time for more strategic work. Nearly two-thirds (62 percent) of decision-makers view technology and AI adoption as critical to enhancing the value CRE will deliver in the future. A ‘future-fit’ CRE team should focus on high-value tasks internally, while routine and repetitive tasks are handled by automation, and outsourcing partners are brought in for specialised tasks and individual projects.