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The Europe smart building market size was USD 3.08 billion in 2020. The impact of COVID-19 has been unprecedented and staggering, with smart buildings witnessing a slightly negative impact on demand across Europe amid the pandemic. Based on our analysis, the market exhibited a significant growth of 16.5% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 3.59 billion in 2021 to USD 11.20 billion in 2028 at a CAGR of 17.6% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
In the Europe smart building market, we have considered smart devices associated with doors such as access control systems, smart door locks, safety systems, and other door hardware accessories. An increasing number of crimes such as theft and burglary at the residential or commercial property has urged the need for smart/Intelligent security system devices to protect the property from thieves. For instance,
Thus, rising security and privacy concerns and the growing trend of the internet of things (IoT) are propelling the penetration of smart building devices in European countries.
Growing Demand for Access Control Door Solutions to Uplift Market during the Pandemic
The COVID-19 pandemic has undoubtedly brought hygiene and health concerns into sharp focus, thereby augmenting the need to adopt emerging and existing technologies to create a safer environment. It has accelerated the need for intuitive and smart systems for building infrastructure. Automatic activation of doors is one of the critical technologies that is gaining popularity in this pandemic. Touch-less buttons, voice-activated technology, or mobile apps integrated with smart door systems are in huge demand these days.
As social distancing and maintaining a hygienic environment has become a norm, commercial buildings in European countries convert their existing manual doors to automatic doors. The easy-to-use and simple features of access control systems and smart door-related hardware is increasing its demand in co-working spaces, purpose-built student accommodation, co-living buildings, multi-tenant housing, hotels, retail, gyms, and many more. Companies like SALTO Systems, in partnership with BioCote, an antimicrobial technology provider, have already integrated antimicrobial silver ion technology in its locker locks, electronic cylinders, smart electronic lock range.
However, though there is demand for smart doors, safety systems, and access control systems, the pandemic had an adverse effect on the profitability in the first and to some extent in the second quarter of 2020. Economic uncertainty, disrupted manufacturing, supply chain constraints, consumer spend constraints, installation restrictions, and distribution have curbed business sales.
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Rising Number of Smart City Projects in European Countries is a Crucial Trend
The European market for smart building solutions is growing at a rapid pace. The United Kingdom, France, Germany, Italy, the Netherlands, and Spain are leading countries in Europe regarding the adoption of connected devices. Smart city projects have thrived in past years in the country, especially in large cities, such as Eindhoven, Amsterdam, and Rotterdam. Despite Brexit's uncertainty, investments in smart type of building projects and connected technologies have remained solid in the United Kingdom. Companies are investing in their office space to enhance and improve employee collaboration and security.
Central and Eastern Europe (CEE) is expected to show large, unexploited potential for development and growth. Presently, smaller cities are lagging in terms of economic growth, and in many areas, CEE city productivity is below the EU-28 average. Smart investment in CEE can unlock innovative potential as well as address the existing infrastructure gaps. With European Investment Bank (EIB) support, a new momentum accelerates the smart city developments across Europe. Furthermore, the European Investment Bank is working on new techniques to support smart city investment in the CEE region.
Such investments in smart cities and smart building projects increase the demand for access control systems, safety systems, smart door locks, among others.
Report Coverage | Details |
---|---|
Forecast Period | 2021 to 2028 |
Forecast Period 2021 to 2028 CAGR | 17.6% |
2028 Value Projection | USD 11.20 Billion |
Base Year | 2020 |
Market Size in 2020 | USD 3.08 Billion |
Historical Data for | 2017 to 2019 |
No. of Pages | 80 |
Tables, Charts & Figures | 14 |
Segments covered | Solution, Application, and Country |
Growth Drivers | Surging Adoption of Access Control Solutions in Hospitality Industry to Accelerate Growth |
Pitfalls & Challenges | Technical Issues and High Prices of Smart Door Lock May Impede Growth |
Surging Adoption of Access Control Solutions in Hospitality Industry to Accelerate Growth
The hospitality industry is one of the main segments that have advanced in adopting secure access control systems. Providing comfort, convenience, security, and a safe experience to guests throughout their stay is the hospitality industry's important motto. Access control systems offer a safe and secure environment to the guest, thereby supporting hoteliers to deliver the optimal guest experience.
The majority of hotel chains operate with key card access systems offered by companies such as Assa Abloy AB, Salto, GEZE GmbH, and others. Even though magnetic key cards are most popular, radio-frequency identification (RFID) and near-field communication (NFC) cards, which are easier for guests to use, also gain traction in Europe. Besides, biometric door locks, electric strike door locks, keypad door locks, etc., are striving to enter the smart building industry. The user need not have to look for keys or keycards in bags or pockets that may already be occupied with other things. With these solutions, fingerprint recognition and keypad code are on the staff and guests' fingertips, becoming the safest keys to the door locks.
Besides, access control technology continues to grow beyond just offering access to hotel rooms. It has become a part of the visitant experience and a way to enhance overall visitant satisfaction. It also provides hotel operations and management a way to cut costs and streamline processes. Thus, a surge in the adoption of access control solutions in the hospitality industry is driving the growth of the market.
Technical Issues and High Prices of Smart Door Lock May Impede Growth
Even though there are many benefits associated with smart door locks, there are some pitfalls too. Any technical fault in the connected lock system can cause the door to malfunction, failure, or another security risk. The most frequent problem comes with those lock systems operating with smartphones. The possibility of not closing or opening the door when the smartphone is lost, or the smartphone's battery is down can’t be neglected.
Besides, the smart locks are expensive compared to standard lock-and-key boxes. While the homeowners in Europe are starting to embrace innovative home technologies for convenience and security, they are not yet ready to spend a big amount. For instance, a smart lock's average selling price is approximately USD 200, whereas conventional mechanical locks are as low as USD 60. Even though investors and startups progressively recognize the core value of such smart products, most end-users consider only a marginal value of the cost, which is not enough to justify the higher prices of devices. Thus, technical issues and higher price tag devices are likely to pose challenges for the adoption of smart locks.
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Security System Segment to Hold the Largest Share Owing to Rapid Adoption of Access Control and Smart Door Lock Solutions
Based on the solution, the market has been categorized into security systems, safety systems, others (fire door control systems, other parts, and accessories). The security system is further bifurcated into an access control system and smart door lock. The smart door lock is further segmented into biometric door locks, electric strike door locks, smart card door locks, others (keypad door lock, etc.).
The security system captures the maximum share owing to the surge in penetration of smart solutions that can be accessed remotely. Also, the growing demand for access control systems and smart door locks from residential and commercial sectors is driving the growth of security system solutions.
The safety system segment is predicted to show the highest growth rate during the forecast period. Rising installation of panic door hardware and electronic panic hardware in high-density buildings such as large arena complexes, movie theatres, or restaurants will boost the growth of safety systems.
Burglary and Invasion is Likely to Boost the Demand for Smart Building Devices from Residential Segment
Based on application, the market is categorized into residential and commercial. The commercial segment is further sun segmented into hotel, healthcare, retail, and others (commercial buildings, airports, etc.).
Growing incidents like burglary and invasion are expected to increase the demand for smart door locks and access control systems in the residential sector. The commercial segment acquires the largest smart building market share in the European region. The hotel, retail, and healthcare industries are largely implementing access control, safety solutions, and smart door locks to cater to visitors' and guests' safety needs.
The major countries studied in the Europe smart building market are the United Kingdom, Germany, France, Italy, Denmark, and the Rest of Europe
Germany is one of the most matured and established markets in Europe for building technology products, such as building automation, smart locks, and access control systems. German businesses are investing in digital technology to seek opportunities to build home-grown platforms compete globally.
In the UK, there is great potential for the business to grow in this market. The deployment of the smart solution in buildings would benefit and secure buildings from various crimes. However, the government needs to facilitate collaboration between multiple diverse businesses and remove barriers to innovation.
The market potential of France for smart building solutions is large, and the smart solutions – access control, smart door lock, safety systems – provide a catalyst for further growth in Europe.
On the other hand, the Denmark and Irish market is considered to be slow in adopting connected smart building solutions compared to other western European countries.
The Netherlands is expected to be the forerunner in the integration of smart devices that controlled building equipment, as the country has always been open to modernizations and innovations. In recent years, smart type of building projects have been flourishing in the country, especially in large cities, such as Eindhoven, Amsterdam, and Rotterdam.
Companies are Investing in Acquisition, Product Launches, and R&D Activities to Strengthen Their Presence
The prominent key players in the European market continue to invest in the development of existing and new products and modernize its production facilities. The companies are also investing in digital transformation to shape their competitive position in the market further and to develop new products to address market opportunities. The established market players are facing competitive pressure from emerging smart building startups. Therefore, in response to this competitive pressure, companies have increased their investments in innovation through in-house R&D, acquisitions, early-stage incubator programs, and startup funding.
October 2020 –SALTO Systems acquired GANTNER Electronic Austria Holding GmbH to strengthen its access control solutions portfolio and allow SALTO’s customers to offer their employees and guests a hassle-free experience.
September 2020 –1VALET Corp., a smart building solution provider, partnered with SALTO to enhance its product offering and provide a comprehensive and secure smart door lock solution for new-build and retrofit projects.
An Infographic Representation of Europe Smart Building Market
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The market research report highlights leading countries across Europe to better understand the user. Furthermore, the report provides insights into the latest industry trends and analyzes technologies deployed at a rapid pace at the European level. It further highlights some of the growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.
By Solution
By Application
By Country
The market is projected to reach USD 11.20 billion by 2028.
In 2020, the market size stood at USD 3.08 billion.
The market is projected to grow at a CAGR of 17.6%.
The security system segment is likely to lead the market.
The surging adoption of access control solutions in the hospitality industry is driving market growth.
Novoferm GmbH, Bosch GmbH, GEZE GmbH, Johnson Controls, Hormann, Schüco International, Assa Abloy AB, ZKTeco Europe, S.L., dormakaba, SALTO, and SimonsVoss are the key players in the market.
Germany is expected to hold the highest market share.
Based on the security system, the safety system segment is expected to grow with the highest CAGR.