Global Smart Building Market Report and Forecast 2024-2032

Global Smart Building Market Size

The global smart building market reached a value of about USD 86.39 billion in 2023. The market is further expected to grow at a CAGR of 10.4% in the forecast period of 2024-2032 to reach a value of approximately USD 210.46 billion by 2032.

Smart Building Market Outlook

• The most used smart building technologies include IoT, Building Automation Systems (BAS), Energy Management Systems (EMS), Building Information Modelling (BIM), Integrated Facility Management Platforms, AI, ML, AR, VR, and aerial drones.

• The United States is one of the largest IoT-enabled markets and has the highest number of ongoing IoT projects related to smart buildings and smart cities.

• Some smart buildings in the US are Corning Optical Communications, U.S. Green Building Council Headquarters, The Sinclair Hotel, and Duke Energy Centre.

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Smart Building Market Growth

Smart buildings refer to complex residential, commercial, or industrial infrastructures integrated with smart technologies, such as IoT, and AI, aimed at lowering energy consumption costs, supporting a robust electric grid, and alleviating environmental impact. Smart buildings provide occupants with illumination, thermal comfort, ventilation, air conditioning, and other benefits.

The key drivers influencing smart building market development are the rapid technological advancements, including cloud, AI, and edge computing, which are creating growth opportunities. The increasing focus of governments on sustainable development and the growing adoption of IoT devices in building energy management systems are also driving the market. Additionally, the rise in smart city projects and the growing need for energy-efficient structures are further propelling the market growth.

Key Trends and Developments

Increasing demand for smart infrastructure owing to governmental aid and technological advancements are boosting the smart building market growth

June 2024

EllisDon, RBC, and Mattamy Homes have launched the Responsible Buildings Pact, a collaborative initiative aimed at increasing the use of lower carbon building materials in the construction industry.

June 2024

Letianpai, a leading smart home company, has launched the LeTianPai Presence Sensor Box, the world's first Matter millimetre wave radar technology human presence sensor. It turns on the lights upon entering a room and automatically switches them off when people exit the room.

June 2024

The Ayodhya Development Authority (ADA) and SBUT (Smart City Urban Transformation) have won the top smart infrastructure award at the 5th FICCI Smart Urban Innovation for their efforts in developing Ayodhya's infrastructure.

June 2024

The U.S. Department of Energy (DOE) has announced USD 250 million in funding for energy efficiency upgrades and retrofits of commercial buildings through the Energy Efficiency Revolving Loan Fund Capitalisation Grant Program.

Increased focus on energy efficiency

The growing need for energy-efficient structures and rising public and private investment in smart cities are driving the adoption of smart building solutions and thus, fuelling smart building market expansion.

Advancements in IoT and automation

The growing adoption of IoT and automation technologies is enabling the integration of various building systems, improving efficiency, and reducing costs. For example, IoT-enabled lighting systems can adjust brightness and colour based on natural light availability, reducing energy consumption.

Growing demand for smart cities

The concept of smart cities has been gaining traction, and favourable initiatives are being introduced by governments in developing countries, creating a favourable environment for the smart building market.

Growing need for sustainable buildings

The increasing focus on sustainability and environmental concerns is driving the adoption of smart building solutions that can reduce energy consumption and waste. Smart buildings incorporate green technologies like solar panels, advanced insulation, and energy-efficient lighting and HVAC systems which meet LEED, Fitwel, and WELL Building Standards.

Smart Building Market Trends

Rapid urbanisation is compelling governments across the globe to invest in smart city projects and intelligent infrastructures to enhance the relationship between the government and its citizens. With rising investments in smart city projects, the smart building market outlook is expected to turn out favourable during the forecast period.

Moreover, rapid technological advancements focused on providing safety to building occupants and environmental sustainability are expected to further boost the market growth. While rising cybercrimes may hamper the market growth during the forecast period, many building owners are investing in robust cybersecurity measures, such as encryption, network monitoring, and regular security assessments to protect sensitive data and ensure data integrity and privacy.

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Smart Building Industry Segmentation

The EMR’s report titled “Smart Building Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Component

• Building Infrastructure Management Solution

• Energy Management Solution

• Workforce Management Solution

• Network Management Solution

• Services

Market Breakup by Building Type

• Commercial

• Residential

• Industrial

Market Breakup by Region

• North America

• Europe 

• Asia Pacific 

• Latin America 

• Middle East and Africa

Smart Building Market Share

Rising demand for energy management solutions to foster the smart building industry growth

Based on type, the energy management segment is expected to account for a significant share in the market owing to various green building initiatives and government regulations aimed at reducing energy consumption. The systems are known to help in reducing and monitoring the amount of power consumed by the building. By adopting such solutions, building owners and stakeholders can lower their operational expenses. These advantages are expected to increase the popularity of energy management segment in smart building market report.

The building infrastructure management solution is expected to grow steadily due to the rising challenges in optimising high commercial building operational costs. This segment is further categorised into parking management systems, smart water management systems, and elevators & escalators systems. The demand for these solutions is driven by the need for efficient management of building infrastructure, which can help reduce operational costs and enhance occupant comfort.

Commercial segment holds a significant market share due to the need of improving energy costs

As per smart building market analysis, the commercial segment holds the largest share in the market. The demand for smart building solutions in the commercial sector is driven by the need to improve energy efficiency, enhance occupant comfort and safety, and reduce operating costs.

Commercial buildings are adopting advanced IoT sensors to collect data from various building systems and subsystems. This data can be used by building operators to automate and optimise building operations and maintenance, leading to improved efficiency and cost savings. The rapid digitalisation across industry verticals, increasing adoption of smart connected devices, and rising technological advancements have further fueled the growth of the smart building market in the commercial sector.

The residential segment is also expected to grow at a significant CAGR during the forecast period due to a surge in demand for smart home technologies, such as lighting, HVAC, and security systems. The growing awareness of the benefits of smart home technologies, such as remote control, energy savings, and enhanced security, is propelling the adoption of smart building solutions in the residential sector.

Leading Companies in the Smart Building Market

Market players are focused on developing solutions for energy management and physical security systems, to cater to the growing demand for sustainable and efficient buildings

Honeywell International Inc. is a multinational conglomerate corporation headquartered in Charlotte, North Carolina. Founded in 1925, it operates in four main areas: aerospace, building automation, performance materials and technologies (PMT), and safety and productivity solutions (SPS). It is known for its innovative solutions in energy efficiency, automation, and cybersecurity areas.

Cisco Systems, Inc. is a multinational technology company headquartered in San Jose, California. Founded in 1984, it specialises in networking hardware, software, and services. Cisco is known for its routers, switches, and network security solutions. The company has a significant presence in the global IT industry and is a major player in the development of the Internet of Things (IoT).

Siemens AG, founded in 1847, headquartered in Munich, Germany, is a leading provider of industrial automation solutions for energy, healthcare, and transportation industries. The company has a significant global presence and is known for its innovative technologies and solutions in areas such as industrial automation and renewable energy.

Hitachi, Ltd. is a Japanese multinational conglomerate founded in 1910 and headquartered in Chiyoda, Tokyo. The company is active in various industries, including digital systems, power and renewable energy solutions, railway systems, healthcare products, and financial systems.

Other key players in the global smart building market include Schneider Electric SE, and Huawei Technologies Co., Ltd., among others.

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Smart Building Market Analysis by Region

North American market is driven by the high adoption of smart technologies and the presence of major players

North America dominates due to rising use of technologies, such as IoT, big data analytics, AI, and cloud computing to develop smart solutions for buildings and increase the safety of the occupants. The government of US is also working towards protecting the country’s environment and resources by increasing the energy efficiency of buildings by adopting smart technologies. For example, Duke Energy Centre in North Carolina boasts the highest green certification of LEED Platinum. It features 450,000 LED lights and reuses approximately 10 million gallons of water each year, harvested from groundwater, rainwater, and HVAC condensation.

Asia Pacific is also augmenting the smart building market growth by increasingly adopting smart technologies in public spaces, such as shopping centres, neighborhoods, and workplaces. Moreover, the rising urban population and the increasing disposable income are compelling consumers in the region to invest in smart building infrastructures. The Asia Pacific region is also home to several smart city projects, such as Songdo International Business District in South Korea and GIFT City in India, which are expected to drive the demand for smart building solutions.

Key Highlights of the Report

Smart Building Market Report Snapshots

Smart Building Market Size

Smart Building Market Growth

Smart Building Market Trends

Smart Building Market Share

Smart Building Companies

Smart Building Market Regional Analysis