Buildings are becoming more intelligent. Across sectors, organisations are using digital tools to better manage how space is used, how energy is consumed, and how buildings support the people working in them. This shift is being driven by rising costs, stricter environmental regulation, and changes in how workplaces operate.
Smart buildings (those that use connected technologies to monitor and manage operations) are gaining traction as strategic assets. The aim is not just to adopt new technology, but to improve efficiency, flexibility and sustainability.
Global demand is rising fast: the smart building market is projected to grow from $143 billion in 2025 to more than $548 billion by 2032, with much of that investment focused on non-residential properties.
And as systems become more integrated, and data more actionable, the case for investment is becoming harder to ignore.
What is a smart building? (And why now?)
Smart buildings use connected IoT systems to monitor and control the internal environment. This includes lighting, heating, ventilation, access and security, often managed through a central platform using real-time data to automate and optimise performance.
What sets modern smart buildings apart is their ability to respond to changing conditions. Rather than simply automating tasks, they use data to make informed adjustments throughout the day. For example, systems can reduce energy use in underoccupied areas, adjust ventilation based on air quality, or trigger maintenance before faults occur.
This is made possible by the integration of once-separate systems, connected through IoT sensors, analytics platforms and cloud infrastructure. These technologies allow buildings to operate more efficiently, support employee wellbeing and adapt more easily to new demands.
What’s driving the shift?
There are three major trends accelerating the adoption of smart building solutions:
Energy efficiency
Buildings currently use around 30% of the world’s energy and are responsible for more than a quarter of global energy-related emissions. According to the International Energy Agency (IEA), if no action is taken, energy demand from buildings could increase by another 30% by 2060. That would be equivalent to all the energy used by households across the US, EU and China combined in 2015. Improving efficiency is not just about cost, it is essential to reducing emissions at scale.
Shifting occupancy trends
Hybrid working has permanently changed how office space is used. According to CBRE, no region has returned to pre-pandemic attendance levels.
Asia-Pacific leads with 45% of occupiers reporting high office utilisation, compared with just 24% in the US and 15% in Europe. Yet in many cases, buildings continue to operate as if fully occupied, incurring the same energy, maintenance and service costs.
This disconnect is driving a shift in strategy. HSBC, for example, plans to cut its global office footprint by 40%, based on data showing widespread underuse across its estate. Smart building systems give organisations the tools to adapt, by tracking occupancy in real time, adjusting services dynamically, and informing longer-term decisions about space.
ESG and reporting
Environmental performance reporting is becoming a regulatory norm across regions. In the EU, the Energy Performance of Buildings Directive sets clear targets. The UK’s net zero strategy is pushing firms to reduce emissions at pace. In the US, policies like New York’s Local Law 97 impose penalties on inefficient buildings, while Singapore’s Green Mark Scheme links certification to real-time performance.
This shift towards more stringent and transparent regulation is driving demand for systems that can automate data collection, support audit trails, and demonstrate compliance in real time. Smart building technologies help organisations stay ahead of these requirements while also enabling more accurate and consistent ESG reporting.
Security and safety
As building systems become more connected, the risks are no longer just technical. Systems like lighting, ventilation and access control are now networked, which makes them much more useful, but also more exposed.
Most smart building platforms now include protections such as encryption, access controls and audit logs. These are essential for keeping systems secure and ensuring they operate reliably. Many enterprises also use private networks to create a more controlled environment for managing data and devices, especially across multiple sites.
There is also a physical safety dimension. Connected IoT sensors can detect issues like poor air quality, equipment faults or unusual activity, allowing facilities teams to act before problems become more serious.
The role of IoT
The technologies behind smart buildings are not new. Building management systems (BMS) have existed for decades, and many organisations already use automated controls for heating, ventilation and lighting.
What’s changing is the scale and sophistication of what is now possible, largely driven by the growing use of IoT.
IoT gives organisations the ability to monitor, measure and manage conditions across their sites, whether that means controlling lighting based on occupancy, flagging underused spaces, or identifying when equipment is likely to fail.
Common use cases in smart buildings include:
- Occupancy monitoring: Sensors detect usage patterns across different rooms or zones, supporting both real-time adjustments and long-term planning
- Energy performance: Detailed data on when and where energy is consumed allows organisations to reduce waste and optimise usage
- Predictive maintenance: IoT can detect anomalies in building systems, helping to prevent breakdowns and reduce reactive maintenance costs
- Environmental quality: Monitoring air quality and temperature supports employee wellbeing and helps with compliance in regulated sectors. This is a common application of IoT in healthcare environments, where it contributes to patient safety and infection control.
- System integration: IoT connects previously separate systems, bringing HVAC, lighting, security and access control into a single operational layer
- Sector-specific applications: In retail spaces, IoT helps manage footfall, optimise space and control energy use. In logistics and manufacturing facilities, it supports monitoring of air quality, equipment status and energy performance across large or complex sites
There are now over 45 million smart buildings globally, a number expected to more than double by 2026. This growth reflects how organisations are moving beyond isolated upgrades and starting to treat building data as part of broader operational planning.
Making it work
The move towards smart buildings is becoming more achievable. While levels of adoption differ between sectors and regions, the combination of maturing technology and increased organisational focus means more firms are now in a position to act.
Rather than waiting for perfect conditions, many are starting with what they have and building from there. These are some of the practical considerations shaping smart building strategies today.
Building on existing infrastructure
Smart building upgrades do not require starting from scratch. Most organisations already have some digital systems in place, such as energy monitors, automated lighting or a basic building management system. These can often be connected and extended using open standards and IoT platforms.
Retrofit options are improving, and cloud-based tools allow older systems to be integrated without full replacement. The focus is on making use of what is already there, turning existing infrastructure into a foundation for smarter operations.
Bringing systems together
As digital systems multiply across buildings, bringing them together has become more practical. Many organisations are now linking data from areas such as energy, occupancy and access through integrated IoT solutions.
This joined-up approach supports more informed decisions and helps unlock the full value of data already being collected across different systems.
Prioritising secure and scalable connectivity
Security is rightly a priority, particularly when systems are connected across multiple sites or linked to corporate networks. But it is also an opportunity to bring facilities and IT teams closer together. Working with a trusted partner to design a secure IoT network from the outset helps reduce risk, while ensuring that the system can scale as needs evolve.
Framing a clear business case
Smart building solutions are easier to justify when linked to specific outcomes. For example, reducing energy spend, improving space utilisation, or supporting ESG targets. Many organisations are now approaching these projects with a clearer view of the expected return, based on both internal data and sector benchmarks. This is helping shift conversations from experimentation to long-term planning.
Cross-functional leadership
Smart buildings sit at the intersection of multiple business priorities, operational efficiency, sustainability, employee experience and digital transformation. When those priorities are aligned, projects tend to move faster. Leadership teams that involve facilities, IT, finance and sustainability stakeholders from the beginning are better placed to define shared goals and track results over time.
How Three Group Solutions can help
Smart buildings are no longer a future concept. They are a practical, achievable way to meet operational goals and adapt to changing demands.
Three Group Solutions helps enterprises move from idea to implementation. We provide the IoT connectivity and digital infrastructure needed to make smart buildings work, securely, at scale, and across borders.
Whether the aim is cost efficiency, compliance or better use of space, we support clients in creating the conditions for success. Explore our IoT solutions or contact us to learn more about how we can help.
