Real estate and investment management services firm Jones Lang LaSalle set up a technology research and innovation facility in Bengaluru, its first in the country, early this month. The centre will focus on creating intellectual property for its global operations. It currently employs 170 people and could double in strength over the next few years.
The Chicago-headquartered Jones Lang LaSalle was founded more than two centuries ago and has morphed multiple times during its history. Now the company, with more than 80,000 employees and $8 billion in revenues, is trying to transform itself digitally by harnessing emerging technologies such as data analytics, artificial intelligence and augmented and virtual reality.
Kerala-born George Thomas, the company’s Asia-Pacific chief information officer, who works out of its Singapore offices, spoke to TechCircle about why he believes that the core technology of any firm needs to be within the company and should not be outsourced. Thomas, who was with multinational banking giant HSBC before joining JLL, also sees the Bengaluru centre at the heart of the real estate firm’s digital transformation globally. Edited excerpts:
What challenges did you face when moving to real estate from banking?
Before joining JLL, the company's board of directors and the chief executive had a discussion with us (former HSBC executives) about where they were headed and where they wanted to invest in the next five years. That helped me understand the potential of the industry that was just getting ready to unlock its data and be disruptive. Then I exerted a few others (from HSBC) to join me as well at that time. We brought more than 200 data science engineers without experience in real estate to JLL in the last three years.
The biggest challenge was to convert this unstructured, non-digitised data into a digital corporate repository. It is the most valuable commodity in the industry because it can answer any question on commercial real estate. We are also modernising our firm by selling new digital products.
What kind of investments does JLL make?
Our recent annual report shows that around 8% of our revenue has been invested in technology. A year ago, we had announced JLL Spark, a fund headed by two Silicon Valley experts, which we own. We invested $100 million from our balance sheet in the fund, which will promote niche technology ideas in prop-tech.
Do your customers prefer closing deals online or offline via site visits?
Three to four years ago, customers searched for listings online but still preferred calling up a broker. Now, they are more comfortable looking for brokers online first. We see that transition happening in different components of our business. Now, paperwork is also digitised. In the small ticket sizes category, we have seen an increase in the number of people willing to view the space and also transact online. We are yet to see digital transformation for high ticket transactions. We don't have enough digital data in commercial real estate to use artificial intelligence. The nuances of the sector within and outside a country are not going to change drastically. We instead use augmented intelligence.
Which areas of commercial real estate will be disrupted?
I see two things: The entry barrier for simulation is now low because it is cheap. So, there is more competition. Running a technology-based operation is also less expensive.
Physical and digital ideas or assets are also being merged to create new products in real estate. An example would be an office space, which is now becoming a digital space. Today, the requirements for a workspace are drastically different: Are there enough seats in the office today? Can I place an order for food or coffee at my workplace while on the road? Can I book conference rooms and issue visitor badges for my guests online?
We could also see security-based technology products being designed for physical real estate assets. Recently, a physical cash register at a retail giant was hacked and a lot of customer information was leaked. The sensors on the card reader at the outlet had endpoints that were cheap with low computing power and little security or battery backup.
With the advent of smart cities, people need to be comfortable sharing data with the government and institutions. There needs to be a contract and the service level would depend on that.
Do you see online marketplaces replacing players like JLL in the small ticket housing space?
We have actively invested in prop-tech to augment our capabilities such as starting new digital business divisions. Since residential is a small portfolio for us, we have comparatively fewer investments in it. We use data to advise, analyse and transform the business. Data is used to develop products such as intelligence reports and to also manage our client-facing business.
Is facility management a big area for you?
Internet of Things plays a huge role in prop-tech. Through ‘nucleaisation IQ,’ we use sensors in buildings to make structures more efficient and to help landlords understand their performance. It also makes occupiers active partners. If you have data on utilisation, a large player can build future buildings to be more energy efficient.