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Are Smart Buildings becoming trendy?

19 January 2024

Before we dive into the trends surrounding Smart Buildings, we should take a step back and look at what the Smart Building market is doing, and it’s safe to say it’s growing. In fact, it’s predicted that the market for Smart Buildings is expected to grow at a compound annual growth rate (CAGR) of 26.5% from 2023 to 2030. That’s an impressive rate – as a comparison - Netflix had a compound quarterly growth rate (CQGR) of 27.5% between 2016 and 2021.

So, it looks like Smart Buildings are on the up which brings the question, what trends are driving this growth?

Market Trends

Broadly speaking, there are three main trends driving the growth of the Smart Building market, each of which are being facilitated by the rapidly evolving technological advancements:

1. Energy Efficiency

2. Health and Wellbeing of Occupants

3. Output Costs

Energy Efficiency

It has been estimated that approximately 36% of carbon emissions come from buildings, with 40% of the world’s energy consumption also coming from buildings. Essentially, real estate plays a huge role in the ongoing climate crisis but is also something which has the potential to be addressed and changed by making buildings more energy efficient.

In fact, this desire for more energy efficient buildings has even triggered a new buzzword; ‘green buildings’. A green building is essentially one which is energy efficient, water saving, causes minimal harm to the environment, is built with non-toxic materials and which relies on renewable resources.

The term ‘green building’ has become more prominent over recent years and has led to additional jargon like ‘green leases’, ‘green washing’ and our new favourite ‘rainbow buildings’. Of course, we’re not actually talking about the colour or decoration of the building itself, but the trend seems to be for buildings to offer more to owners and occupiers than just four walls, a roof and space. ‘Green buildings’ are considered to be more marketable and are in higher demand as occupiers look to meet their sustainability targets by ensuring the building they occupy is ‘green’.

This trend is pushing the market for Smart Buildings forward because, through their innovative use of IoT and AI Technologies, Smart Buildings can help make buildings greener by monitoring and automatically adjusting the buildings outputs to meet energy requirements.

All in all, the trend for buildings to be more energy efficient or ‘green’ is pushing the market for Smart Buildings up.

Health and Wellbeing of Occupants

It’s no surprise that the world post COVID-19 is different. We still feel and will continue to feel for years to come the changes bought by the pandemic. In particular, the re-opening of commercial buildings post-pandemic for in-office work is driving the need for smarter buildings.

The current expectation amongst occupiers is that commercial buildings must offer a safe environment which manages cleaning and sanitisation together with proper office ventilation, smart entry control, temperature measurement and control and space optimisation for physical distancing. That’s a lot of requirements for one building and could be considered too burdensome for one person or one facility manager to implement and achieve. However, with Smart Building technology, it is now becoming possible to achieve all of this.

In particular, health focused technologies in Smart Buildings allow for modern air filtration and purifications systems to ensure indoor air quality whilst environmental sensors monitor parameters like CO2, humidity and particulate matter helping to maintain optimal conditions for occupiers throughout the building.

It would seem, that the trend for employees’ health and wellbeing is at the forefront of employers’ and is also pushing the market for Smart Buildings along.

Output Costs

We don’t doubt that everyone is feeling the cost of living crisis and this is true for both individuals and companies alike. In particular, energy prices have risen through the UK which has created a demand for energy consumption to be monitored and controlled to limit the output costs.

Through technology, Smart Buildings can optimise energy use which reduces consumption and associated costs whilst lowering carbon emissions. This is achieved by optimising the HVAC, lighting, plug loads and other systems based on occupancy and usage patterns which ultimately reduces energy waste and costs.

This trend for buildings to produce less waste and lower output costs is also driving forward the need for smarter buildings.


Smart Buildings are becoming increasingly popular in commercial real estate. A key driver of this is the requirements of corporate occupiers as they respond to trends within the market. Ultimately, there is an expectation that buildings are energy efficient, designed to support the health and wellbeing of occupiers and to reduce energy waste and output costs. Smart Buildings continue to gain significant traction as they provide advantages for both property owners and building occupants.

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