Raj talked about the future shape of commercial real estate, such as the outlook of the work environment and sustainability within the industry.

Having already invested more than $390m in over 50 proptech start-ups, JLL Spark continues to fund a series of ventures looking to change and adapt real estate.

When discussing what innovations the company was seeing currently in the commercial real estate sector, Raj told B&C he can see elements which are beginning to gain momentum, if only in the early stages — such as large language models (LLMs).

A LLM is a type of machine learning model that can perform natural language processing tasks, such as building conversational chatbots, generating text, answering FAQs, analysing customer feedback and, importantly, classifying and categorising text data for analysis.

Raj said that LLMs are at the experimental phase but will allow data which has already been collected to be categorised rather than having to do so manually.

“[That’s] really valuable because it means I don't have to go searching through another tool. I don't have to worry about filters which allow me to get some things and not others. And if it's my data and it's trustworthy, I can be pretty sure that the answer is correct.”

Technology isn’t only changing the dynamics of how the industry can analyse and manage real estate, but the very nature of the way we work, with the shifts in how the world goes about its business already significantly and, as Raj sees it, permanently changing.

“People will never go back to the office as frequently as they did before Covid so, given that, how do you build and maintain a great company when, at any point in your week, some of your team will be somewhere else?” asked Raj.

“We’re looking for solutions there as that really plays into how much office space is needed; what are we going to do with the space that’s not needed? For that office space, what should it be like?”

Raj sees that the dramatic swing which was introduced to the world of work in the past few years since the pandemic has permanently shifted the trend of returning to the office, something which he believes signals for greater, long-term flexibility.

“Offices will become the receptacle for different styles of working,” he stated.

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One way Raj highlighted how flexibility could produce positive changes in the face of unpredictability in the future is through the forward thinking of developments, whereby buildings are constructed with future conversions in mind.

Despite an emphasis on flexibility in the real estate sector, Raj noted that the costs involved may be the issue when adopting this.

“The reason why we don't see very much of it is that that requires an additional upfront cost. We, as an industry, are very parsimonious when it comes to spending our money.”

With the sector not willing to dip its hands in its pockets and invest in what Raj sees as a more flexible future and, instead, taking a more immediate mindset, it’s not something that has built a lot of momentum — yet.

“I see a few enlightened developers building in certain things that will allow them to work more easily in a [changing] environment.

“But I don't see a lot of it happening, so it's really those people that have understood they need that flexibility. I wouldn't say it's an industry trend yet.

“We’re going to have technologies out there that will make it cheaper to be able to have that flexibility and, when you do that, I think the industry will adopt it.”

The finance market may also be slow to act and, liking it to the world of sustainability, Raj predicts that if government regulation shifts to this flexible model, the finance industry too will follow on.

One area that it is yet to make a larger impact is the sustainable elements of real estate. Raj claimed that while this is somewhat driven by client demand and government regulation, the industry is reluctant to invest of its own accord and technology is also in its infancy, though with an interesting lifespan ahead of it.

“We unfortunately are still in the phase of gathering data in order to understand what our sustainability position is as opposed to remediating [and] improving.

“We are looking for those tools that will say, ‘We've got the data now, what do you do about it? How do you actually deliver on a reduction in carbon or other gases? How do you build something sustainably and how do you properly keep that going over time?’ 

“Those are really interesting questions that the entire industry wants an answer to.”