The demand for smart building products in Western Europe, including BMS platforms and connected equipment, continued to increase in 2018 and 2019 and is forecast to grow at a 10.8% compound annual growth rate (CAGR) over the 2018-2023 period. The connected equipment and BMS platform markets in Western Europe were $3.1 billion and $773 million respectively in 2018.
According to Omdia, Germany was the largest single market in Western Europe, representing approximatively 26% of regional market shares for both connected equipment and BMS platforms. Germany is one of the most established and mature markets in Europe as well as the biggest market for building technology products, such as BA, HVAC, lighting, and access control among others. Nonetheless, research from Omdia suggests that the Netherlands is a forerunner and an industry leader for integration and BMS platforms that controlled equipment, in Europe and worldwide, as the country has always been open to innovations and modernizations. In this context, smart building projects have been thriving in recent years in the country, especially in large cities, such as Amsterdam, Eindhoven, and Rotterdam. Despite the uncertainty surrounding Brexit, investments in smart building projects have remained solid in the UK, with market revenues forecast to almost double for connected equipment to reach $1.3 billion in 2023 and to increase at a 6.2% CAGR for BMS platforms over the 2018-2023 period.
In Western Europe, an important ongoing trend in the construction market has included a rising demand from end users to integrate energy equipment, and to a lesser extent, security and other devices, with BMS platforms. Omdia believes that the environmental regulations enforced by the European Union (EU) institutions and executed by member states are driving an important share of these integrations, especially in countries such as France, Belgium, and Germany. The Energy Performance of Buildings Directive (EPBD) and the Energy Efficiency Directive (EED) have been the two notable legislations that have contributed to the development of the smart building market in this region. The most significant proposition of the EPBD directive is that it requires all new commercial buildings constructed after 31 December 2020 to be “nearly-zero energy buildings” (NZEB).
Unlike most other countries in Europe, the push for smart building technologies in the Netherlands comes primarily from end users and building owners rather than legislation. They have directly integrated smart building technologies in their company strategies, and this is particularly the case in the office sector, where stakeholders want to design inspirational buildings for employees and tenants. In this context, an increasing number of enterprise-level buildings in the Netherlands are investing in platforms that connect employees to their workplace, enabling them to book meeting rooms and navigate around the building. Space optimization software, which monitors how every square foot of space is being used, is also often featured in offices in the Netherlands.
In the UK, occupants and people are becoming a widespread business factor in motivating investment decisions and smart building strategies. This trend is primarily noticeable within the office building sector, where owners and facility managers are gradually implementing solutions to maintain and improve employees’ health, wellbeing, and comfort. The demand for smart building technologies is also gradually switching from traditional applications toward new advanced use cases. On the other hand, the Irish market is considered to be more traditional, thus, the transition toward connected and digital buildings has been happening at a slower pace.
While the smart buildings market is expanding in Europe, its development and expansion still faces some challenges. For instance, in Germany, one challenge is the current lack of skilled labor. As the country is moving away from coal and nuclear energy and working towards decarbonizing its heating and building sectors, the demand for skilled workers is increasing in the construction sector. Omdia believes the lack of skilled labor may hurt the energy transition and the movement towards intelligent buildings. In France, one obstacle has been the price-sensitiveness of the construction market. The initial costs of BMS platforms and connected equipment are the greatest barriers that can deter investments into the integration of building technologies. Omdia also identified the cost of staff training and support along with the fear of change as other barriers. Finally, in the UK, as real construction spending is set to slow down over the forecast period, investments in smart building projects may also suffer, but this is yet to be confirmed.
The Smart Buildings Intelligence Service by Omdia provides a comprehensive, detailed overview of the global demand for smart building products. The focus of this report is on building management system (BMS) platforms and how certain pieces of equipment connect through these platforms in buildings. This is the second edition of the study.