Smart Building Market Size, Share & COVID-19 Impact Analysis, By Component (Solution (Building Infrastructure Management (Parking Management System, Smart Water Management System, Elevators and Escalators System), Security and Emergency Management (Access Control System, Video Surveillance System), and Energy Management (HVAC Control System and Lighting Control System)) and Services (System Integration and Deployment, Support and Maintenance)), By Application (Residential and Commercial (Hotel, Healthcare, Corporate Offices, Others), and Regional Forecast, 2023-2030

The global smart building market size was valued at USD 80.60 billion in 2022 and is projected to grow from USD 96.96 billion in 2023 to USD 408.21 billion by 2030, exhibiting a CAGR of 22.8% during the forecast period.

Smart buildings contain a sophisticated control system that controls building operations, such as ventilation, air conditioning, heating, lighting, and other systems, consisting of sensors, actuators, and microchips. The market gains traction as these buildings offer capabilities to lower operational costs, tenant management, security management, and building performance management. Furthermore, the emergence of 5G technology and the rise in smart city projects are expected to create lucrative opportunities for the growth of the industry. For instance,

• In December 2021, the National University of Singapore (NUS) Department of the Built Environment introduced a new research center to promote the adoption of 5G technologies, accelerate 5G training in smart facilities management, and boost the digital capability of Singapore’s construction industry,

COVID-19 IMPACT

Surge in Demand for Safe and Healthy Workplaces to Fuel Market Development

The reopening of commercial buildings post-pandemic for in-office work is expected to surge the demand for smart technologies for a safe environment. The commercial building facility managers and the corporate tenants must offer a safe office environment post-lockdown. Thus, they are expected to utilize smart technologies in managing regular cleaning and sanitization, proper office ventilation, smart entry control, temperature measuring devices, and space optimization for physical distancing. These factors are expected to fuel the demand for smart building solutions.

Further, smart technology can be helpful in the future to track employee movement to limit the spread of infections. As intelligent technology interacts with systems and people, it can offer real-time data. The pandemic has surged intelligent building solution opportunities to help cut the spread of airborne diseases. Thus, the demand for advanced infrastructure is expected to witness exponential growth post-pandemic in the long term.

LATEST TRENDS

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Increasing Smart City Projects to Surge Market Opportunities

Rapid urbanization is expected to accelerate the global smart building market growth in the forthcoming years. For instance, a high-level Expert Forum 2019 report shows that 70% of the world population is expected to shift to urban areas by 2050. This factor would surge the demand for buildings and spaces for sustaining livelihood and work requirements. Considering the urbanization trend, governments worldwide invest in smart city projects with advanced infrastructure, cleaner transportation, intelligent buildings, and other smart technology. Building contributes to the major energy consumption and investment, so developing connected buildings is an initial step toward smart city projects. For instance,

• In addition to the Smart Nation initiative, the Singapore government has also launched a Green Mark Scheme. In accordance with the scheme, buildings are given a traffic-light code that resembles their environmental friendliness. Under this scheme, the government has targeted converting 80% of buildings to be certified as green by 2030.

• In February 2019, Aragon aimed to reduce 20% of total energy consumption by focusing on Zaragoza smart city buildings. Through intelligent building, the city is expected to boost energy efficiency. Today, through the collaboration of smart cities and buildings, the city witnessed a 30% reduction in operational costs and targeted ISO 50001 standard compliance.

Thus, with rising smart city projects and investments, the demand for smart and connected buildings is expected to grow rapidly.

DRIVING FACTORS

Growing Energy Consumption Concerns to Drive Market Growth

The growing concerns about increasing energy consumption worldwide are expected to fuel more advanced and energy-efficient technology. For instance, as per the IoT and smart building 2019 report of IBM Corporation, commercial and real estate buildings utilize 50% water and energy. The report further states that buildings are expected to consume maximum energy by the end of 2025. Similarly, according to Schneider Electric Whitepaper, 36% of carbon emission comes from buildings. This high consumption and wastages exponentially increase the overall cost of operations and maintenance.

However, strict governance on energy consumption and green building initiatives boost the demand for energy-efficient technology across buildings. This factor is expected to propel the implementation of intelligent building solutions globally. According to the IBM Corporation report, implementing advanced technology, including AI, Internet of Things (IoT), and others helped reduce energy usage by 40% and 10%-30% maintenance costs. Similarly, as per Deloitte’s report, the implementation of smart technology and IoT devices witnessed 70% energy saving in three years. This factor is expected to fuel the market growth.

RESTRAINING FACTORS

Growing Incidence of Cyber Attacks in Connected Buildings to Hamper Market Growth

The significant barrier to market growth is growing cyber-attacks. Intelligent technology is connected to every building system and device. It may sometimes provide confidential and personal information on being hacked. For instance, as per the Kaspersky report, four out of 10 connected buildings are at risk of cyber-attacks. This high risk of cyber-attack is expected to hamper market growth in the future. Thus, it is essential to implement contingent operational plans to ensure the safety of connected buildings from such attacks.

SEGMENTATION

By Component Analysis

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Increasing Focus on Energy Saving to Propel the Solution Segment

Based on component, the market is bifurcated into solution and services.

The solution segment includes building infrastructure management, security & emergency management, and energy management. The solution segment is dominating the market.

Energy management is expected to grow rapidly due to increasing green building initiatives and stringent government regulations on energy consumption. For instance, Shanghai’s New Development Bank (NDB) implemented intelligent building solutions to monitor indoor lighting, electric curtains, and windows and witnessed more than 15% energy savings.

The security & emergency management solution is expected to gain maximum share. There is increasing demand for security systems, surveillance systems, advanced building operation services, and smart workplace solutions in commercial buildings. This factor is likely to drive the security & emergency management solutions segment. It is further categorized into the access control system, video surveillance system, and safety system.

Building infrastructure management is expected to grow steadily, owing to the rising challenges in optimizing high commercial building operational costs. It is further categorized into a parking management system, smart water management system, and elevators & escalators system.

The services segment is expected to showcase rapid growth during the forecast period. This factor is attributable to the rising implementation of intelligent building solutions. The demand for professional services, such as consulting services, system integration, deployment, support, and maintenance, is increasing.

By Application Analysis

Growing Investment in Smart Technologies to Enhance Commercial Building Operational Efficiency

By application, the market is classified into residential and commercial.

The commercial segment is expected to dominate the segment, owing to increasing focus by stakeholders such as developers and owners of Commercial Real Estate (CRE) on the intelligent building to reduce operational costs. Governments across countries are scrutinizing the CRE to invest and improve energy-saving building procedures significantly.

The commercial segment is further categorized into hotel, healthcare, retail, corporate offices, and others.

Due to increasing demand for advanced systems to manage hospital operations, healthcare is expected to lead.

The residential segment is likely to showcase the rapid adoption of intelligent building solutions to manage safety and security, smart maintenance, energy consumption, and more. The increasing demand for smart home lighting, HVAC monitoring, smart door locking systems, and smart meters is expected to surge the intelligent building demand in residential applications.

REGIONAL INSIGHTS

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Geographically, the market is fragmented into five major regions such as North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America. They are further categorized into countries.

North America is expected to dominate the regional revenue share during the forecast period. Prominent companies across regional industries are shifting toward intelligent building solutions to boost workplace operations. The U.S. led the region’s share, owing to increasing investments in green building technology. For instance, after implementing intelligent building infrastructure, the U.S.-based Duke Energy Center, a 51-floor tower skyscraper, received the highest green certificate from LEED Platinum.

Europe to exhibit significant smart building market share after North America. The growing European Union's focus on implementing efficient energy-saving technologies in residential and commercial buildings is expected to fuel the market share. European companies focus on employee well-being by adopting the WELL Building Standard certificate. Thus, the rising number of smart workplace buildings is likely to increase market opportunities.

Asia Pacific is expected to gain remarkable growth during the forecast period. Growing smart city projects are predicted to surge the intelligent building demand in the region. Further, the growing population in China and India is expected to drive the technology to manage urban space demand. Also, increasing government initiatives in developing smart commercial places, shopping malls, and localities to reduce energy consumption is expected to drive the global market growth.

The Middle East & Africa has grown significantly due to increasing demand for energy-efficient smart building solutions. Additionally, the region is inclined toward reducing carbon emissions and adopts smart technologies to reduce such harmful gaseous emissions.

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Similarly, Latin America showcases steady growth as the government aims for efficient and sustainable building. For instance, the National Energy Conservation Program (PAR PROCEL) launch of the Resources Application Plan in Brazil is expected to fuel the demand for smart technologies to manage buildings.

KEY INDUSTRY PLAYERS

Growing Strategic Acquisition and Collaborations to Boost Key Players’ Market Position

The key players in the market are strategically entering into partnerships and collaborations to expand their market share. These players also partner with different rating and assessment certification providers to ensure the safety and quality of smart solutions. The players are acquiring local players across countries to expand their global presence. Also, the market players are continuously investing in developing and launching new intelligent solutions and services for managing commercial and residential building operations.

List of Key Companies Profiled:

• Cisco Systems, Inc. (U.S.)


• Siemens AG (Germany)


• ABB Ltd. (Switzerland)


• Schneider Electric SE (France)


• Endeavor Business Media (U.S.)


• IBM Corporation (U.S.)


• Legrand SA (U.S.)


• Honeywell International Inc. (U.S.)


• Johnson Controls Inc. (U.S.)


• Hitachi, Ltd. (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• January 2023: Telefonica, in collaboration with Siemens, presented a technology proposal to transform rooms into smart buildings at Mobile World Congress (MWC). The company promotes digitization and connectivity as key means for customers to develop their enterprises more efficiently and sustainably. 


• January 2023: ABB unveiled the ABB Cyclon smart building management system (BMS) at Light Middle East 2023. Its latest offerings provide customers with real-time data, operational analytics, and comprehensive solutions for smarter, more efficient buildings. 


• January 2023: Wipro Limited announced the launch of its latest solution, Smart-i-building, which runs on the Microsoft Azure platform. This solution reduces the impact of office buildings on their sustainability footprint through efficient use of corporate space, reduced energy consumption, and increased operational efficiency.


• November 2022: Qualcomm Technologies, Inc. and Siemens Smart Infrastructure partnered on 5G networks for smart type of buildings. This joint effort aims to advance the digitization of building automation by developing new and smarter smart devices in the future.


• June 2022: View announced the launch of its cloud-native smart building platform. The platform provides a real estate technology of software components to manage, connect and improve a portfolio of smart type of buildings with tough cybersecurity defense and maximum flexibility.

REPORT COVERAGE

An Infographic Representation of Smart Building Market

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The report highlights leading regions worldwide to offer a better understanding of the user. Furthermore, the research report provides insights into the competitive landscapes, latest industry, and smart building market trends and analyzes technologies deployed rapidly globally. It further highlights some growth-stimulating factors and restraints, helping the reader gain in-depth knowledge about the market.

REPORT SCOPE & SEGMENTATION