Working with Real Estate Tech Companies to Develop Services for the World
On May 31, 2018, JLL received a portion of the third-party shares allocated by real estate tech company Japan REIT, and the two companies are now strategic partners. We have invested money in global real estate tech companies, but this is the first case with a Japanese company.
JLL, promoting technology
The tech wave has impacted all kinds of industries, knocking the bottom out of the way business is done. The real estate industry was said to be slow to invest in tech, but the time for revolution has come. Why? Because utilization of real estate tech is becoming a worldwide trend.
Japanese real estate industry is face-to-face with labor shortages thanks to a low birth rate and aging population. The industry has long operated as individuals working independently, but continuing on that way is going to get harder. The industry relies too heavily on capable individuals, and as a result, companies themselves don’t accumulate knowledge and skills, which brings about a host of problems. For example, the quality of service they provide varies widely by the skills of the specific person handling the project. The shortage of workers will become more and more severe in the future, and therefore, the industry needs to focus its limited resources on high-growth businesses. JLL believes that tech will be the key to the evolution of the real estate industry.
The first investment in a real estate tech company
JLL’s announced its investment in Japan REIT Inc. on May 31, 2018. The investment is a concrete initiative to promote real estate tech, something that JLL is serious about. Japan REIT Inc. is a real estate tech company that develops systems for real estate funds and operates REIT portal sites. Most notably, it is a market leader in platforms for REIT and private funds. JLL received a portion of the shares that Japan REIT allocated to third parties, and the two became strategic partners. JLL’s global knowledge and experience and JRT’s expertise make a great match, and both are sure to grow even faster thanks to the other. This alliance was made with the goal of contributing to the progress of real estate tech in the Japanese real estate market and the revitalization of the market as a whole.
Though this investment in Japan REIT marks the first of its kind in Japan for JLL, JLL has been actively investing in global real estate tech companies. JLL invested in ZipGrid, a company based in India that makes community asset management tools, in May 2017, and, in July 2017, also invested in Ecolibrium Energy, which provides energy management solutions. JLL also established tech startup JLL Spark in July 2017. JLL Spark composes a team specializing in the development of startup companies that provide real estate tech, and this team carries out strategic investments and develops new services. In April 2018, JLL Spark acquired Stessa, a company based in San Francisco, U.S.A. to which it provides real estate portfolio management services. In January 2018, JLL invested 3.8 million USD in Foyr, a real estate tech startup company in India that provides visualization of interior design and customized tools. Each of these new partners possesses cutting-edge technology that provides innovative solutions and valuable services to JLL’s clients.
Spreading Japanese service to the world
In the future, most users of real estate, including offices, will be “digital natives” who grew up surrounded by technology. Using technology will be essential in order to meet the needs of these digital natives, who are familiar with technology and expect it to be available to assist them. Chances are high that we will witness the birth of all-new services unbound by the conventional wisdom of the real estate industry. JLL Japan will continue to seek collaboration actively with real estate tech companies, and, going forward, hopes to develop services here in Japan that are useful not only in Japan, but throughout the global market. With its global network, JLL hopes to be a gate through which Japanese real estate companies can soar around the world.