Smart Buildings

“Smart Building” as a term is used extensively without a clear, consistent, definition of what constitutes a smart building. We, at The PTC, define it as a building (modern or retrofitted) where the technology footprint and architecture allows a large degree of data visibility, insights and automated decision-making to make the building perform better.

Breaking down Smart Buildings

There are three distinct buckets within this category which have different objectives and characteristics. These can interact and are often complementary.

  • ESG focussed systems and hardware.
  • Asset Management systems
  • User Experience systems

Of these ESG has seen the greatest growth in recent years and accounts for 40% of the technology. Whilst initially regulatory driven, ESG has moved to the mainstream with an increased focus on energy efficiency in a more costly energy environment.

Asset management systems have evolved on better data, aggregation, and data analysis (including AI) to truly improve the ongoing management of the property and facilities. Predictive maintenance (long hypothesized) is a reality now for many landlords with reduced costs for repair and staffing.

User experience systems are one of the key tools for attracting and retaining tenants. End users now expect to have a seamless and bespoke UX from simple amenities such as sensory lighting to pass based security and storage as well as real-time ways to book space.


There are global solutions to the three different categories, but we see patterns within each. In Europe (due to the EU being an early adopter of regulation) there has been a stronger focus on ESG tech whilst in Asia they have been at the forefront of user experience systems due to the pace of new building and competition for anchor tenants.

Challenges & concluding remark

There is a strategic challenge of energy efficiency as the cost to do so may mean lower incentive to invest in user experience amongst others. In conclusion, smart buildings cover a broad range of technologies and use cases but could significantly improve the performance and cost impact of a building. Increasingly they are also part of a retention strategy with increased yield evidenced for smarter and more energy-efficient buildings. As such a property owner without a strategy for adoption will come under pressure from key stakeholders.