Smart Building Market Size - By Component, End Use Analysis, Share, Growth Forecast, 2025 - 2034

Smart Building Market Size

The global smart building market was valued at USD 103 billion in 2024 and is estimated to grow at a CAGR of 24.4% to reach USD 827.7 billion by 2034. The growth of the market is attributed to factors such as the increased importance of energy efficiency, productivity and sustainability. The rising 5G, IoT and AI technology integration, improved data analytics, and shift towards building management systems as a service model are driving the smart building industry.
 

The increasing importance of energy efficiency and sustainability is one of the leading factors driving the demand for smart buildings worldwide. There is a worldwide requirement for the reduction of energy consumption. Advanced technologies such as IoT, energy management software, and automation are used in smart buildings, which optimize energy usage. Advanced HVAC systems use AI to optimize climate control, adapting to occupancy patterns and external weather conditions. Additionally, regulations such as Leadership in Energy and Environmental Design (LEED) is increasing focusing on adaptation of sustainability and green building practices?. This pushes businesses to adopt smart technologies that optimize energy use.  
 

Moreover, sustainability is being shaped by the increasing use of IoT and AI. IoT is essential in monitoring and management of energy consumption. AI analyzes large amounts of data from building operations and identifies inefficiency and patterns. The advanced system integrated with AI technologies monitors waste production, water usage, and resource consumption. This method to enhance sustainability driving the growth of smart buildings.
 

Constant advancement in technology of smart buildings, which is also known as intelligent buildings is offering ease in operations and comfort to the customers, which is driving the market for smart buildings. Technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and cloud-based platforms are reshaping building management systems. Predictive maintenance, real-time monitoring, and automation of various building functions have become possible due to these technologies. Administrators of the buildings can make smart decisions, by using these technologies to reduce the chance of downtime and other losses. Owing to these factors the future of smart buildings is expected to grow significantly. 
 

Companies should invest more in energy efficiency and sustainability solutions to compete in the market. Companies should create more AI-driven software in real-time based on occupancy, weather, and usage patterns. Companies should comply with LEED standards to attract environmentally conscious businesses and regulatory compliance buyers.
 

Smart Building Market Trends

• One of the key trends in the smart building industry is the integration of Artificial Intelligence and Internet of Things. Combination of IoT and AI is creating more responsive and smarter buildings. Use of AI in advanced HVAC systems is optimizing climate control, and it is helpful in analyzing occupancy patterns and external weather conditions. Additionally, equipment failures can be anticipated to ensure uninterrupted operation. In September 2024, at BEX Asia 2024, UnaBiz launched three IoT solutions to enhance smart building efficiency. The UBZ310 optimizes Fan Coil Unit (FCU) maintenance, the CT Series enables wireless energy monitoring, and the AI-powered VS Series provides accurate occupancy data. This solution integrates IoT and AI to automate monitoring, reduce costs, and support sustainability in smart buildings.
   
• Cloud-based Building Management Systems (BMS) are another emerging trend in the smart building market, which is revolutionizing control and maintenance in the building. These cloud-based Building Management Systems (BMS) pose enhanced scalability, data analysis capabilities, and flexibility. As earlier, local servers are used for building automation systems, which require constant manual adjustments. Although the use of cloud-based solutions enables building managers to access real-time data and control systems without being physically present at the control center. For instance, in June 2023, Honeywell launched the Digital Prime platform, a cloud-based digital twin for smart buildings and industrial operations. It offers real-time updates, built-in security, and global access, enabling safer engineering, reduced maintenance, and improved efficiency in industrial buildings such as Oil & Gas, manufacturing, and chemicals.
   

Smart Building Market Analysis

Based on components, the market is segmented into solutions and services. . The services segment is projected to grow at a CAGR of 26.6% during the forecast period. The high growth of this segment is driven by increasing demand for predictive maintenance services.
 

• Solution market accounted for USD 63.3 billion in 2023. Solution segment includes safety & security management, energy management, building infrastructure management, Integrated Workplace Management System (IWMS), and network management. The safety & security management in smart buildings includes access control system, video surveillance system, and fire and life safety system. Also, HVAC control system, and lighting management system components are considered under energy management. Furthermore, building infrastructure management is done by managing vital systems such as parking management system and water management system.
   
• The service market accounted for USD 27.9 billion in 2022. The service segment includes consulting, implementation, and support & maintenance. Consultancy services simplify technology to optimize customers’ experiences. Support & maintenance services are shifting from only repair to predictive maintenance. According to the U.S. Department of Energy, up to one third of cost can be cut down by predictive maintenance. Owing to such advantages this segment is growing.  
   

Based on end use, the smart building market is segmented into residential, commercial, and industrial. The industrial segment is projected to grow at a CAGR of 26.4% during the forecast period.
 

• The residential segment is expected to account for 27.2% of the global smart buildings market in 2024 owing to the increasing importance of the comfort and safety of residents. Smart residential buildings are also known as future buildings. Dynamic ecosystems, which leverage IoT and AI integration and automation in systems such as security, HVAC, and access control are offering residents’ great comfort, and this is driving the segment.
   
• The commercial segment is expected to account for 51.7% of the global smart buildings market in 2024. According to the U.S. Energy Information Administration, in U.S. commercial buildings account for 18% of total energy consumption in the U.S. Integration of IoT sensors and building-management systems (BMS) improves energy efficiency. Commercial smart buildings have the potential to solve this issue worldwide, hence this segment has the potential to grow at maximum CAGR.
   
• The industrial segment is expected to account for 21% of the global smart buildings market in 2024 owing to the constant technological advancement, surge in demand for ease in operations, and growing emphasis on energy-saving and smart lighting solutions. A smart industrial building employs advanced automation systems to optimize operations, energy usage, and security.
   

In 2024, North America accounted for the largest share of 38.7% of the global smart buildings market. The large share of this market is attributed to rising demand for energy efficiency.
 

• In 2024, the U.S. smart building market accounted for USD 30.6 billion. United States smart buildings market is driven by the growing emphasis on the energy efficiency and sustainability. In U.S. customers are increasingly prioritizing energy efficiency and sustainability. They are focusing on reducing usage of energy consumption and carbon footprint. This growing awareness about energy management is expected increase the demand for energy management solutions, which help businesses and residential buildings monitor and optimize their energy usage.
   
• The Canada smart buildings market is expected to reach USD 68.9 billion by 2034. The market for Canada smart buildings is driven by government initiative such “Smart buildings initiative”. The initiative taken to by government of Canada for building federal buildings more energy efficient and to reduce greenhouse gas emissions.
   

In 2024, Europe accounted for a share of 30.5% of global smart building market. Factors supporting the growth of smart buildings in Europe are governments and European Union initiatives for energy consumption.
 

• The Germany smart buildings market is expected to reach USD 46.3 billion by 2034. The growth of smart buildings in Germany is attributed to the growing demand for resident comfort. Advancement in technology enabling residents to experience accessing and monitoring and controlling HVAC and lighting system.
   
• The UK smart buildings market is expected to grow at a CAGR of 22.2% during the forecast period. The UK market is bolstered by the growing need for safety & security management. In United Kingdom customers are increasingly seeking security in their homes, convenience, efficiency. Owing to these factors there is growing demand for smart buildings. Integration of AI and IoT, enabling technology to offer automated solutions that enhance daily living experience, is a key driver shaping consumer preferences in the market.
   
• France's smart buildings market is expected to grow at a CAGR of 26 % from 2025 to 2034. France is focusing on environmental consciousness and sustainability, which is fueling the smart building market in the country. Customers are increasingly seeking energy-efficient solutions, which help reduce carbon footprints and contribute to a greener future.
   
• Sweden's smart buildings market is expected to reach USD 18.5 billion by 2034. According to the International Trade Administration, and the U.S. Department of Commerce, the smart building sector of Sweden is expanding, which is driven by the nation's climate-neutral 2045 goal. Energy-efficient retrofits, smart automation, and digital services are the key initiatives of the government.
   
• The Netherlands smart buildings market is projected to reach USD 11.6 billion by 2034. The conductive environment is created due to the growing economy in the Netherlands, which is driving the market for smart buildings in the Netherlands. Government initiatives promoting innovation and technological adoption are driving the smart building industry in the Netherlands, encouraging customers to invest in automation technologies and connected devices.
   

In 2024, Asia Pacific accounted for a share of 19.3% of the global smart buildings market. The growth in the region is driven by advancements in technology and shifting customers preferences to comfort.
 

• The China smart buildings market is expected to grow at a CAGR of 27.2% during the forecast period. According to IEEE, building energy consumption in China has surged from 10% to 25% since 1978 and it is expected to rise by 35% annually. Adaptation of smart buildings will play a key role in energy efficiency, integrating smart grids, and optimizing operations. This factor will drive the demand for the smart building market in China in the forecasting period.
   
• Japan is expected to account for a share of 19.4% of the smart buildings market in Asia Pacific. Japan has a greater number of aging populations; this is a significant driver for smart building technologies. Challenges associated with elderly citizens can be addressed with smart building solutions, such as remote monitoring, health management, and improving safety.
   
• South Korea's smart buildings market is expected to grow at a CAGR of 25% during the forecast period. In December 2023, the Department of “The Ministry of Land, Infrastructure, and Transport (MOLIT)” of South Korea announced its plan to build 10,000 smart plus buildings by 2035, integrating robotics, UAM, and autonomous vehicles. The projects include hospitals, city halls, and robot-friendly apartments.
   
• Smart building market in India is expected to grow at the highest CAGR of 30.1% during the forecast period. According to the Bureau of energy efficiency of India, 35% of energy consumed by building in India. In smart buildings, technological advancement optimizes energy efficiency. Owing to the operational efficiency smart buildings can help to reduce 40% of electric energy consumption.
   
• Smart buildings market in ANZ is expected to grow at a CAGR of 29.7% during the forecast period. Smart building solutions are becoming more common in Australia. Automation, and the ability to monitor or control devices according to climate, and lighting reduce some of the inconveniences for residents.  This comfort of occupants is driving the smart buildings market in the region.
   

In 2024, Latin America accounted for a share of 3.6% of the global smart building market. The high adoption of smart buildings for reducing energy consumption.
 

• Brazil's smart buildings market is expected to grow at a CAGR of 25.3% during the forecast period. The growth of the smart buildings market in Brazil is attributed to the government initiative to Net Zero Energy trends. Government programs promoting energy efficiency, align with global Net Zero Energy Building trends.
   
• Mexico's market is expected to grow at a CAGR of 26.4% during the forecast period. The growth of the smart buildings market in Mexico is attributed to increasing awareness about climate change. The construction industry in Mexico is focusing on enhancing its integration of renewable energy systems, and sustainable materials. Additionally, there is demand for the development of climate-resilient buildings capable of mitigating the impacts of extreme weather events. Smart buildings are equipped with automation systems, which identify users' requirements. Therefore, the market is expected to grow in the forecast period.
   

In 2024, the Middle East and Africa accounted for a share of 7.9% of the global smart building market. The increased push towards sustainability, energy efficiency, and automation in public infrastructure are major factors driving market growth.
 

• In 2024, UAE accounted for 21.1% of the Middle East & Africa industry. The growth of the UAE smart buildings market is driven by the government's pursuit to become a global leader in smart buildings, energy-efficient technologies, and sustainable development. The UAE smart buildings market is primarily driven by the advancement in technology and customizations are done in the solution services to attract end-users. In the UAE demand for smart buildings has increased due to a constant rise in awareness about energy conservation.
   
• Saudi Arabia's smart building market is expected to grow at a CAGR of 20.8% during the forecast period. Saudi Arabia's smart buildings is driven by Saudi Green Initiatives aiming to reduce carbon emissions and increase energy efficiency. Saudi Arabia's smart buildings sector is at the forefront of innovation in the construction industry due to government initiatives such as the National Transformation Program (NTP) and Saudi Arabia Vision 2030. This program emphasizes the development of smart infrastructure, and cities, which makes smart buildings important in the construction industry. Additionally, the government is making commitments to sustainability to create a favorable environment for the growth of the smart buildings market.
   
• South Africa market will reach USD 7.8 billion by 2034. The growing adoption of smart buildings in industrial and residential end-use is driving the market growth in South Africa during the forecast period. Smart Infrastructure provides the flexibility that allows South African society to respond and evolve to changing conditions.
   

Smart Building Market Share

The smart buildings market is competitive and highly fragmented with the presence of established global players as well as local players and startups. The top 5 companies in the global smart building industry are ABB, Intel Corporation, Microsoft Corporation, Hitachi ltd, and IBM, collectively accounting for a share of 36.2%. These companies are competing in the market by offering advanced solutions that leverage cutting-edge digital technologies. For instance, In September 2024, Hitachi developed a new BuilMirai IoT solution for small and medium-sized buildings to enhance building management and user comfort. Offered as subscription-based services, the solutions include security, facility monitoring, and surveillance features, all accessible via smartphones. This initiative strengthens Hitachi's green & smart building business, promoting efficient, sustainable building operations and supporting digital transformation.
 

Additionally, companies are acquiring small key players to acquire expertise and expand their business. For instance, in January 2025, Johnson Controls acquired a Netherlands-based provider of building automation solutions, Webeasy. The aim of acquisition was to enhance its smart building capabilities across Europe. This strategy strengthens Johnson Controls leadership in energy-efficient, sustainable building management by integrating Webeasy’s innovative, cost-effective technologies tailored for small to medium-sized commercial buildings, improving operational efficiency and supporting sustainability goals in the growing market.
 

Smart Building Market Companies

Prominent companies in the smart building industry include:

• ABB
• Intel Corporation
• Microsoft Corporation
• Hitachi ltd.
• Huawei
   

ABB is collaborating with other tech giants to provide advanced solutions to end user customers. For instance, in November 2023, ABB entered partnership with Samsung C&T to enhance smart building capabilities, and integrated Samsung C&T’s Homeniq platform with ABB's home automation systems. This collaboration enables seamless smart connectivity across residential and commercial end use, and focusing on energy management, automation, and cost-efficiency.
 

Microsoft Corporation primarily focuses on the Azure Digital Twins, integrating IoT, cloud, and AI for smart building solutions to optimize energy efficiency.
 

Huawei is leveraging its Smart Building Energy Management System (SBEMS), and enhancing automation, sustainability, and operational efficiency across smart cities and enterprises.
 

Smart Building Industry News

• In December 2024, Delta Electronics launched Delta Intelligent Building Technologies (DIBT), a one-stop smart building solutions provider in North America. Integrating Amerlux, Delta Controls, LOYTEC, March Networks, and VIVOTEK, DIBT enhances building automation, energy efficiency, security, and comfort. This initiative strengthens Delta’s leadership in smart, sustainable buildings, offering end-to-end solutions for future-ready infrastructure.
   
• In September 2024, UnaBiz launched smart building IoT solutions to enhance facilities management and sustainability. The FCU monitoring system optimizes maintenance, energy monitoring streamlines sustainability reporting, and occupancy tracking improves space utilization. These wireless, AI-powered solutions support cost efficiency, automation, and green building initiatives, aligning with Singapore’s vision for smarter, sustainable urban environments.
   
• In June 2024, Schneider Electric launched its SMART Buildings Division in Canada to drive sustainable, intelligent building solutions. Enhancing energy efficiency, automation, and occupant well-being, it empowers building owners with data-driven insights for decarbonization. Focused on smart infrastructure, the division integrates predictive analytics and IoT to optimize operations, reinforcing Schneider’s leadership in sustainable building innovation.
   
• In March 2024, Siemens and Enlighted partnered with Zumtobel Group to advance smart buildings through IoT-enabled intelligent lighting. Integrating Enlighted’s sensors into Zumtobel’s fixtures, the collaboration enhances energy efficiency, sustainability, and real-time building analytics. Focused on commercial buildings, education, and hospitals, it supports decarbonization and smart operations, reinforcing Siemens’ digital transformation and smart infrastructure leadership.
   

This smart building market research report includes in-depth coverage of the industry with estimates & forecasts in terms of revenue (USD Billion) from 2021 to 2034, for the following segments:

Click here to Buy Section of this Report

Market, By Component

• Solution
  • Safety & security management
    • Access control system
    • Video surveillance system
    • Fire and life safety system
  • Energy Management
    • HVAC control system
    • Lighting management system
    • Others
  • Building infrastructure management
    • Parking management system
    • Water management system
    • Others
  • Integrated Workplace Management System (IWMS)
    • Real estate management
    • Capital project management
    • Facility management
    • Operations and services management
    • Environment and energy management
  • Network management
    • Wired technology
    • Wireless technology 
• Service

Market, By End Use

• Residential
• Commercial
  • Healthcare
  • Retail
  • Academic
  • Others 
• Industrial

The above information is provided for the following regions and countries:

• North America
  • U.S.
  • Canada
• Europe
  • UK
  • Germany
  • France
  • Italy
  • Spain
  • Russia
• Asia Pacific
  • China
  • India
  • Japan
  • South Korea
  • ANZ 
• Latin America
  • Brazil
  • Mexico 
• MEA
  • UAE
  • Saudi Arabia
  • South Africa