Asia-Pacific Smart Building Market Research, 2032
The Asia-Pacific smart building market size was valued at $4.26 billion in 2022, and is projected to reach $17.59 billion by 2032, registering a CAGR of 15.3% from 2023 to 2032.
Smart buildings are characterized by the use of completely integrated systems that communicate critical information and utilize this information to improve the efficiency of the buildings. Smart buildings can help manage almost every aspect of building management using IoT sensors, higher floors, and building automation, including HVAC, lighting, shading, security, and even user-centric tasks like navigation and conference room scheduling. These structures manage and ensure the efficiency, energy, comfort, access, and monitoring of the enterprises that occupy them.
One of the important drivers of the Asia-Pacific smart building market is the need to minimize energy costs and promote sustainability. Maintaining sustainability and minimizing carbon footprint can be challenging for commercial buildings. According to the “Towards Carbon Neutrality in Building Sector in ASEAN” conference in Singapore on 09 February 2023, ASEAN’s building energy consumption is estimated to increase by about 60% by 2030 and about 120% by 2040. Energy efficiency measures such as the use of smart building solutions can mitigate this increase by at least around 20%. Such instances are highlighting the need for smarter building management solutions, which in turn, produces some great opportunities for the growth of Asia-Pacific smart building solutions. Smart building management solutions can provide businesses (or residents) with effective resource management tools.
For instance, the automated scheduling and monitoring tools enabled by networked sensors allow for greater resource utilization, such as enhanced power management and water use. Another factor driving the market, is the need to facilitate safe return of employees to offices in post-COVID scenario. For instance, smart building solutions can monitor indoor air quality (IAQ), and inform habitants and alerts building operators about the same. Higher indoor air quality is directly associated with health and well-being of building’s habitants. According to Honeywell ASEAN President, a large percentage of workers in the ASEAN region work from office at least part of the time, and despite many having access to IAQ information in their workplace, they still want more information.
Role of smart building solutions in facilitating safer return to offices is also a driver in maintaining value of land, especially in ASEAN countries like Singapore, Malaysia, Thailand and The Philippines. While most companies still do not require employees to work from office every day, it is a requirement for at least a few days, thereby keeping offices in use and helping land to retain its market value.
On the other hand, the lack of strong government regulations promoting this market in Asia-Pacific acts as a hindrance. According to a study titled ‘The readiness of IoT enabled Smart Buildings in Malaysia’ published in 2021, the lack of government incentives to implement energy-savings is a major obstacle in the larger adoption of smart building solutions in Malaysia. Similarly, it was also highlighted in “Towards Carbon Neutrality in Building Sector in ASEAN” conference in Singapore in 2023, that in Thailand, Malaysia, Vietnam, The Philippines and Indonesia, the building energy codes certification for buildings is voluntary for most buildings and mandatory for certain building types only in Indonesia, Malaysia, The Philippines, Thailand and Vietnam. Furthermore, only the electrical system in Malaysia is covered under the mandatory energy management system required to reduce energy consumption by buildings.
Looking ahead, the advancement in IoT field and other types of smart building technologies provides significant opportunities for growth of smart building market in these countries. Internet of Things (IoT) is one of the most important technologies used in smart building market. It connects multiple devices through a common Internet Protocol (IP) platform to exchange and analyze information. This has led to its numerous applications in smart building market such as smart HVAC (heating, ventilation and air conditioning) and smart lighting to enhance guest and employee experience, smart restrooms which schedule cleaning crews after a set number of visitors have passed through, and smart soap and smart paper towel dispensers which digitally alert cleaning crews when their levels are running low, or even restock on their own. A variety of other technologies are used in smart buildings such as artificial intelligence (AI) and machine learning (ML), building automation and building information modeling (BIM), artificial reality (AR) and virtual reality (VR), and aerial drones.
Segmentation Overview
On the basis of component, it is classified into solution and services. The Asia-Pacific smart building market was dominated by the solution segment in 2022, whereas the services segment is expected to witness a higher growth rate during the forecast period. The share of solutions segment is driven by its use IoT technology, which enables efficient and economical use of resources, such as IoT sensors, analytics software, a user interface, and means of connectivity. This helps create safe and comfortable environment for end users. In addition, it uses a range of technology, such as sensors and actuators, to gather activity data on various aspects within the building, which helps analyze and utilize operation more efficiently.
On the basis of solution type, the Asia-Pacific market is classified into building infrastructure management (BIM), security & emergency management (SEM), energy management, network management, workforce management, waste management, and tenant management. The market was dominated by security and emergency management (SEM) segment in 2022, whereas energy management segment is likely to witness the highest growth rate during the forecast period. The demand for SEM in smart building is increasing owing to intelligent evacuation systems that combine Internet of Things (IoT), fog layer, and cloud layer.
By Solution Type
Security & Emergency Management segment accounted for the highest market share in 2022.
The IoT technologies are used to capture environmental information and the location of occupants to track their movements and automatically count those who have reached the designated muster, or gathering point. Under tenant management segment, the market is sub-segmented into tenant sales management, tenant electric bill management, and tenant facility management.
In this, the tenant facility management sub-segment garnered the highest share in 2022, whereas tenant sales management sub-segment is expected to grow at the fastest rate. The use of tenant facility management solutions allow building owners and facility managers to automate many mundane and daily tasks such as vendor management, attendance, inventory management, utility monitoring, billing, surveys, complaints, patrolling and visitor management. This saves time, reduces costs and increases workplace efficiencies. Such solutions come with personalized dashboards which can help facility managers gauge site health in 5 minutes, thereby further driving their demand.
The building type segment of the Asia-Pacific smart building market is segmented into residential, commercial, and industrial segments. The commercial segment was estimated as the largest segment in 2022, while residential segment is expected to witness the fastest growth rate during the forecast period. The rise in adoption of Internet of Things (IoT) in commercial buildings fuels the market growth. Smart buildings help to reduce energy consumption, they realize significant cost-savings, and are able to provide a much more user-friendly experience, adapting automatically to the needs of commercial building users. Smart building sensors share data with software to trigger actions based on touch, temperature, proximity, humidity levels, water levels, and so on.
By Building Type
Commercial segment accounted for the highest market share in 2022.
By country, the Asia-Pacific market is analyzed across Malaysia, Thailand, Australia, The Philippines, Indonesia, Vietnam, Singapore, and Taiwan. The market was dominated by Australia in 2022, while Vietnam is expected to expand at the highest rate during the forecast period. Supportive government regulations and standards are supporting the growth of the smart building market in Australia. For instance, in August 2023, CSIRO, Australia’s national science agency launched a new $11 million project to drive the development of new technology to support flexible demand for energy, empowering consumers to have more control over their electricity usage, save money and ease pressure on the energy grid.
By Region
Australia accounted for the highest market share in 2022.
In addition, up to 200 buildings, selected by the project consortium, will participate in the pilot and be connected to the DCH Platform. The DCH Platform forms part of CSIRO’s developing Smart Energy Mission which is focused on building Australia’s next generation of integrated and equitable energy systems.
Competitive Analysis
Competitive analysis and profiles of the major Asia-Pacific smart building market players that have been provided in the report include Cisco Systems, IBM Corporation, Honeywell International, Siemens, Johnson Controls, ABB, PTC, Huawei Technologies Co. Ltd., Hitachi Ltd., and Intel Corporation.
Recent Developments in APAC Smart Building Market
Recent Product Launches in the Market
In May 2022, Cisco Systems, Inc. announced the release of Cisco Cloud Controls Framework (CCF) to the public. It empowers teams to make sure cloud products and services meet security and privacy requirements, owing to a simplified rationalized compliance and risk management strategy, saving significant resources.
In September 2023, Huawei Launched Solutions that Facilitate Digital Infrastructure for an Intelligent World. In terms of computing power, Huawei has introduced architectural and system innovations to support high-computing-power platforms for different scenarios, thus overcoming computing bottlenecks for AI foundation model training.
In the same month, Hitachi, Ltd. Launched EasyDry®, the new paperless, dry-type, high-voltage (HV) transformer bushing family that is available up to 550-kilovolt (kV), a remarkable solution that sets up a new concept on reliability, sustainability, and cost efficiency in Transformer bushings.
In May 2022, IBM released the latest “AI adoption for business study and society standards”. The adoption and acceptance of AI is to enhance productivity and solve challenges with greater social and environmental impact and help companies address labor and skills shortage by automating repetitive tasks.
Recent Collaborations in the Market
In the same month, Honeywell and Accelerator for America collaborated to launch Honeywell Smart City Accelerator Program to help cities strategically plan their futures and build capacity to fund transformational initiatives.
In May 2023, Honeywell collaborated with Arcadis to provide tools and services that help optimize energy use and carbon emissions in commercial buildings worldwide.
Top Impacting Factors
Some of the significant factors impacting the Asia-Pacific smart building market include the surge in adoption of smart buildings driven by growing need for better utilization of the building (and building premises) and the need for better resource management in urban environments. In addition, the growth in the need for public safety and security fuels the growth of the Asia-Pacific smart building market. However, the lack of strong regulations limits the growth of the market. Conversely, the emergence of artificial intelligence and other advanced technologies ranging from drones to analytics, and artificial reality (AR) and virtual reality (VR), are anticipated to provide numerous opportunities for expansion of the Asia-Pacific market during the forecast period.
Historical Data & Information
The Asia-Pacific smart building market is fairly competitive, owing to the strong presence of existing vendors. Market vendors are expected to gain a competitive advantage over their competitors because they can cater to market demands with a wide range of products. The competitive environment in this market is expected to increase as technological innovations, product extensions, and different strategies are adopted by key vendors.
Key Benefits for Stakeholders
- This study comprises an analytical depiction of the market size along with the current trends and future estimations to depict the imminent investment pockets.
- The overall Asia-Pacific market analysis is determined to understand the profitable trends to gain a stronger foothold.
- The report presents information related to key drivers, restraints, and opportunities with a detailed impact analysis.
- The current Asia-Pacific smart building market forecast is quantitatively analyzed from 2022 to 2032 to benchmark financial competency.
- Porter’s five forces analysis illustrates the potency of the buyers and suppliers in the Asia-Pacific smart building market.
- The report includes the market share of key vendors and market trends.
Asia-Pacific Smart Building Market, By Component Report Highlights
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Analyst Review
The demand for smart buildings has grown over the past few decades as smart buildings can help provide actionable information about a building (or a specific area inside the building), allowing owners or occupants to better manage the facilities of the building.
The main purpose of developing a smart building is to save operating costs, increase occupant comfort, automate energy consumption management, track the state of critical building assets, and satisfy industry worldwide standards and sustainability requirements. Such feature set of the smart building are promoting the growth of the Asia-Pacific smart building market. Key providers in the Asia-Pacific smart building market are PTC, Huawei Technologies Co., Ltd., and Hitachi, Ltd.
With the growth in demand for smart building, various companies have established partnerships to increase their smart city solutions offerings. For instance, in April 2022, ABB announced a joint partnership with South Korean electronics manufacturer, Samsung Electronics Co., Ltd. to develop energy savings, energy management solutions, and smart Internet of Things (IoT) solutions for both, residential and commercial buildings.
In addition, with the surge in demand for smart buildings, various companies have expanded their current services to continue with the rise in demand for smart city solutions. For instance, in May 2022, American multinational technology conglomerate, Cisco Systems, Inc., announced the launch of its Cisco Cloud Controls Framework (CCF) to make sure Cisco’s cloud and IoT products & services meet security and privacy requirements with a simplified and rationalized compliance and risk management strategy, enabling efficient utilization of resources.
Moreover, many market players in Asia-Pacific have expanded their business operations and customer base by increasing their acquisitions. For instance, in January 2021, American computer software and services company, PTC Inc., announced the acquisition of software as a service (SaaS) and product life cycle management (PLM) solutions vendor, Arena Solutions. With this acquisition, PTC aims to strengthen its IoT and smart solution offerings.
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