5 ways smart buildings are changing real estate

Real estate developers need to diversify. The reasons are clear: construction costs and land prices are rising, and new building projects are under increasing public pressure, scrutiny and oversight. The solutions are clear, too: investment in smart buildings creates efficiencies, reduces costs, increases tenant satisfaction and improves energy performance.


It means the value of commercial real estate is no longer based solely on location, and landlords and developers now need to provide efficient spaces that offer excellent user experience and promote wellbeing and productivity to compete.

1. They’re encouraging tenants to pay a premium

Smart buildings are an attractive proposition to prospective tenants. Many organisations are turning to the new technology for its implications for productivity and efficiency, and businesses typically expect some level of smart technology as the default; as a result, they are willing to pay significantly higher amounts for a truly smart building, rather than a retrofitted one. This expectation that modern office buildings should contain smart technology means real estate developers whose properties do not meet this new demand will swiftly fall by the wayside.

2. They’re making buildings more energy efficient

In this age of climate crisis, energy efficiency should be among the real estate developer’s priorities. Smart buildings automatically handle processes such as climate control that are extremely inefficient in traditional buildings; they will, for instance, turn off wasteful lighting and HVAC systems when they’re unnecessary, or according to measurements of heat, light and occupancy. This also helps cut costs and comply with regulation, and it’s been a key driver of investment in smart buildings.

3. They’re saving real-estate companies money

IoT-connected building management systems (BMS) are creating value for real estate companies through substantial efficiency savings. Smart monitoring and predictive capabilities help to reduce energy use, automate decision-making, predict faults and maintenance, and lower administrative costs. They can generate significant amounts of data that can be used to regulate lighting and air-conditioning, they can pre-empt maintenance and bolster security using real-time monitoring systems. All this saves money and makes administration more efficient.

4. They’re providing more sophisticated services

Smart buildings help real estate developers provide a sophisticated, bespoke service, using the information they gather to more precisely meet their tenants’ unmet needs. They can offer unique services—focusing on optimising occupant wellbeing, for instance—to better differentiate themselves from their competition. They can even use data from existing smart buildings to make better judgements about space usage and even building location during the development stage—this data can, in turn, be passed over to tenants to help inform their own building use.

5. They’re creating even more revenue opportunities

As data analytics becomes more sophisticated, new revenue opportunities will emerge for real estate developers. Smart buildings will gather increasingly large amounts of data on an expanding menu of variables, and developers can sell the analytics they produce on, for example, occupancy, to their tenants as a service to help them improve their own behaviour, or even to urban planners keen to understand how people are using office buildings.


Smart buildings are presenting vast opportunities to real estate developers. From the planning stage to the building’s operational lifecycle, they are creating countless new revenue sources and allowing users and owners to make even more sophisticated decisions about the way they are used. To find out even more about the opportunities of smart buildings, register your interest for Intelligent Building Europe 2021, taking place on 12-14 July 2021 at ExCeL London.