JLL, the world’s second-biggest real estate firm, is launching a $100m venture-capital fund aimed at retooling the property industry with smart buildings, online apps and blockchain.
The early-stage VC fund is the second initiative from the property giant’s new tech venture JLL Spark, launched last August under the leadership of Silicon Valley entrepreneurs Mihir Shah and Yishai Lerner.
The pair also unveiled the acquisition of property investment technology firm Stessa in March.
The provision of digital services to real estate agents, managers and investment firms — known informally as “proptech” — is a small but growing field in an industry often characterised as slow-moving and conservative.
Shah told Financial News he believes this is changing. “It’s a very exciting time in this industry,” he said. “Having spent 22 years in Silicon Valley, where everything moves very quickly, this is a very different space for us to be in — but we are now at a genuine inflection point.”
Shah said JLL had seen “an enormous acceleration” in the number of property technology companies. “We are launching this fund to take advantage of this, and make early-stage investments in several technology start-ups.”
The fund, whose $100m is entirely JLL’s cash, will write cheques anywhere between the low hundreds of thousands of dollars up to several million, Shah said, giving it scope for a large and diversified portfolio of venture investments.
Key to its business model is the promise of testing various real-estate technology software and services on JLL’s properties and business units worldwide, Shah said.
“We are building a ‘growth team’ consisting of product development people who will help proptech entrepreneurs create a value proposition and take it to clients, and get feedback from those clients,” said Shah. “We are also planning to have a ‘building lab’, a few buildings in top metro centres around the world where we can fast-track these new technologies.”
The fund has already made its first couple of investments, Shah said, though he declined to disclose any names.
Areas that JLL is particularly keen on include smart buildings, which are properties with inbuilt analytical technologies that allow their managers to run them cheaper; and employee experience technologies, which can allow workers in an office building to control windows, book conference rooms or order food from the cafeteria via phone apps, for example.
Shah said the firm is also interested in ideas for applying blockchain and distributed ledger technologies to the buying and selling of real estate: “When you’re trying to do a real estate transaction there is a pretty long process and a lot of paperwork. One piece of technology we see is people using blockchain to make that process easier.”
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